As filed with the Securities and Exchange Commission on April 24,
1995.
File Nos.
33-88924
811-8962
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ( )
Pre-Effective Amendment No. 2 (X)
Post-Effective Amendment No. ( )
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 2 (X)
FRANKLIN TEMPLETON MONEY FUND TRUST
(Exact Name of Registrant as Specified in Charter)
777 Mariners Island Blvd., San Mateo, California 94404
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (415) 312-
2000
Harmon E. Burns, 777 Mariners Island Blvd. San Mateo, Ca. 94404
(Name and Address of Agent for Service of Process)
Approximate Date of Proposed Public Offering: As soon as
practicable following the effective date of this registration
statement.
Registrant hereby elects to register an indefinite number of its
Shares of Beneficial Interest pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended.
The Money Market Portfolios (the master fund) has executed this
registration statement.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission acting
pursuant to said Section 8(a), may determine.
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton Money Fund Trust
CROSS REFERENCE SHEET
FORM N-1A
Part A: Information Required in Prospectus
N- 1A Location in
Item No. Registration Statement
1. Cover Page Cover Page
2. Synopsis "Expense Table"
3. Condensed Financial "Performance"
Information
4. General Description of "About the Fund";
Registrant "Investment Objective
and Policies of the
Fund"; "General
Information"
5. Management of the Fund "Administration of the
Fund"
6. Capital Stock and Other "Distributions to
Securities Shareholders";
"Taxation of the Fund
and Its Shareholders";
"General Information"
7. Purchase of Securities "How to Buy Shares of
Being Offered the Fund"; "Other
Programs and
Privileges Available
to Fund Shareholders";
"Exchange Privilege";
"Valuation of Fund
Shares"
8. Redemption or "How to Sell Shares of
Repurchase the Fund"; "Valuation
of Fund Shares"; "How
to Get Information
Regarding an
Investment in the
Fund"; "General
Information"
9. Pending Legal Not Applicable
Proceedings
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton Money Fund Trust
CROSS REFERENCE SHEET
FORM N-1A
Part B: Information Required in
Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Contents
12. General Information and "The Fund" (See also
History Prospectus "About the
Fund")
13. Investment Objectives "Additional
and Policies Information Regarding
the Fund's Investment
Objective and
Policies" (See also
Prospectus "Investment
Objective and Policies
by the Fund")
14. Management of the Fund "Officers and
Trustees"
15. Control Persons and "Officers and
Principal Holders of Trustees"
Securities
16. Investment Advisory and "Administration and
Other Services (See Other Services" (See
also Prospectus also Prospectus
"Administration of the "Administration of the
Fund") Fund")
17. Brokerage Allocation "Policies Regarding
Brokers Used on
Portfolio
Transactions"
18. Capital Stock and Other "The Fund" (See also
Securities Prospectus "About the
Fund")
19. Purchase, Redemption "Additional
and Pricing of Information Regarding
Securities Being Purchases and
Offered Redemptions of Fund
Shares";
"Determination of Net
Asset Value" (See also
Prospectus "Valuation
of Fund Shares")
20. Tax Status "Additional
Information Regarding
Distributions and
Taxes"
21. Underwriters "The Fund's
Underwriter"
22. Performance Data "General Information"
23. Financial Statements Financial Statements
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton
Money Fund Trust
PROSPECTUS
MAY 1, 1995
777 Mariners Island Blvd., P.O. Box 7777
San Mateo, CA 94403-7777 1-800/DIAL BEN
Franklin Templeton Money Fund II (the "Fund") is an open-end,
diversified series of the Franklin Templeton Money Fund Trust
(the "Trust"), a management investment company. The Fund's
investment objectives are:
HIGH CURRENT INCOME LIQUIDITY
CAPITAL PRESERVATION
THE FUND, UNLIKE MOST FUNDS WHICH INVEST DIRECTLY IN SECURITIES,
SEEKS TO ACHIEVE ITS OBJECTIVES BY INVESTING ALL OF ITS ASSETS IN
THE SHARES OF THE MONEY MARKET PORTFOLIO (THE "PORTFOLIO"), A
SEPARATE SERIES OF THE MONEY MARKET PORTFOLIOS ("MONEY MARKET"),
WHOSE INVESTMENT OBJECTIVES ARE THE SAME AS THAT OF THE FUND.
The Portfolio in turn invests primarily in various money market
instruments, such as: United States ("U.S.") government
securities, and other U.S. dollar denominated securities which
the Board of Trustees of Money Market has determined present
minimal credit risks and which have, as required by federal
securities laws, received a rating in one of the two highest
categories as determined by nationally recognized statistical
rating organizations ("NRSRO") which may include obligations of
U.S. regulated banking institutions and commercial paper of
domestic and foreign issuers, and corporate obligations maturing
in 397 days or less as described under "Investment Objective and
Policies of the Fund."
This Prospectus is intended to set forth in a clear and concise
manner information about the Fund and the Trust that a
prospective investor should know before investing. After reading
the Prospectus, it should be retained for future reference; it
contains information about the purchase and sale of shares and
other items which a prospective investor will find useful to
have.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. SHARES OF THE
FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
A Statement of Additional Information ("SAI") concerning the Fund
and the Trust, dated May 1, 1995, as may be amended from time to
time, provides a further discussion of certain areas in this
Prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated herein by reference. A
copy is available without charge from the Fund or the Fund's
principal underwriter, Franklin/Templeton Distributors, Inc.
("Distributors"), at the address or telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN
DESCRIBED IN ANY STATE IN WHICH THE OFFERING IS NOT AUTHORIZED.
NO SALES REPRESENTATIVE, DEALER, OR OTHER PERSON IS AUTHORIZED TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS. FURTHER INFORMATION MAY BE OBTAINED
FROM THE UNDERWRITER.
CONTENTS PAGE
Expense Table
About the Fund
Investment Objectives and
Policies of the Fund
Risk Considerations
Administration of the Fund
Distributions to Shareholders
Taxation of the Fund
and Its Shareholders
How to Buy Shares of the Fund
How to Sell Shares of the Fund
Other Programs and Privileges
Available to Fund Shareholders
Purchasing Shares of the Fund in
Connection with Retirement Plans
Involving Tax-Deferred Investments
Exchange Privilege
Telephone Transactions
Valuation of Fund Shares
How to Get Information
Regarding an Investment in the Fund
Performance
General Information
Account Registrations
Important Notice Regarding
Taxpayer IRS Certifications
EXPENSE TABLE
The purpose of this table is to assist an investor in
understanding the various costs and expenses that a shareholder
will bear directly or indirectly in connection with an investment
in the Fund, including the expenses of the Portfolio in which the
Fund invests. The estimated annual operating expenses of the Fund
are based on contractual amounts, except for "Other Expenses of
the Fund", which are based on estimated amounts for the Fund's
current fiscal period. Such expenses for the Portfolio reflect
aggregate operating expenses, before fee waivers and expense
reductions, for the Portfolio's fiscal year ended June 30, 1994.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases NONE+
Maximum Sales Charge Imposed on Reinvested NONE
Dividends
Deferred Sales Charge 1.00%+
Exchange Fee (per transaction) $5.00*
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management and Administration Fees 0.61%**
(after fee waiver)
12b-1 Fees 0.65%^
Other Expenses of the Fund 0.35%
Other Expenses of the Portfolio 0.02%
Total Operating Expenses 1.63%**
(after fee waiver)
+ Shares redeemed within a "contingency period" of 18 months of
the calendar month following such investments are subject to a 1%
contingent deferred sales charge. See "How to Sell Shares of the
Fund - Contingent Deferred Sales Charge" for more information.
*$5.00 fee imposed only on Timing Accounts as described under
"Exchange Privilege" in the Prospectus. All other exchanges are
processed without a fee.
** Includes the contractual fees of the administrator for the
Fund of 0.46% and 0.15% accrued by the Portfolio's investment
manager. However, the investment manager of the Portfolio agreed
in advance to waive a portion of its management fees. With this
reduction, management fees were 0.13% of the average net assets
of the Portfolio. Total operating expenses of the Fund, including
expenses of the Portfolio, with this reduction equal 1.63% of the
Fund's average net assets.
^Consistent with National Association of Securities Dealers,
Inc.'s rules, it is possible that the combination of front-end
sales charges and Rule 12b-1 fees could cause long-term
shareholders to pay more than the economic equivalent of the
maximum front-end sales charges permitted under those same rules.
Investors should be aware that the preceding table is not
intended to reflect in precise detail the fees and expenses
associated with an individual's own investment in the Fund.
Rather the table has been provided only to assist investors in
gaining a more complete understanding of fees, charges and
expenses. For a more detailed discussion of these matters,
investors should refer to the appropriate sections of this
Prospectus.
EXAMPLE
As required by regulations of the SEC, the following example
illustrates the expenses that apply to a $1,000 investment in the
Fund over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period.
1 YEAR 3 YEARS
$17 $51
THIS EXAMPLE IS BASED ON THE AGGREGATE ANNUAL OPERATING EXPENSES
OF THE FUND AND THE PORTFOLIO, BEFORE FEE WAIVERS AND EXPENSE
REDUCTIONS, SHOWN ABOVE AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE EXPENSES, WHICH MAY BE MORE OR LESS THAN
THOSE SHOWN. The operating expenses are borne by the Fund and
Portfolio and only indirectly by shareholders as a result of
their investment in the Fund. (See "Administration of the Fund"
in the Prospectus for a description of the Fund's and Portfolio's
expenses.) In addition, federal regulations require the example
to assume an annual return of 5%, but the Fund's actual return
may be more or less than 5%.
The preceding table summarizes the estimated aggregate fees and
expenses to be incurred by both the Fund and the Portfolio. The
Board of Trustees of the Fund considered the aggregate fees and
expenses to be paid by both the Fund and the Portfolio under the
Fund's policy of investing all of its assets in shares of the
Portfolio, and such fees and expenses the Fund would pay if it
invested directly in various types of money market instruments.
This arrangement, whereby the Fund invests all of its assets in
shares of the Portfolio, enables various institutional investors,
including the Fund and other investment companies, to pool their
assets, which may be expected to result in the achievement of a
variety of operating economies. Accordingly, the Board of
Trustees concluded that the aggregate expenses of the Fund and
the Portfolio were expected to be lower than the expenses that
would be incurred by the Fund if it invested directly in various
types of money market instruments. Of course, there is no
guarantee or assurance that asset growth and lower expenses will
be recognized. Franklin Advisers, Inc. ("Advisers"), however, has
voluntarily agreed to limit expenses so that in no event will
shareholders of the Fund incur higher expenses than if the Fund
invested directly in various types of money market instruments.
Further information regarding the Fund's and the Portfolio's fees
and expenses is included under "Administration of the Fund."
ABOUT THE FUND
Franklin Templeton Money Fund II is a diversified series of the
Franklin Templeton Money Fund Trust, an open-end management
investment company, commonly called a "mutual fund", which has
registered with the SEC under the Investment Company Act of 1940
(the "1940 Act"). The Fund is currently the Trust's only series.
The Trust is a Delaware business trust organized on January 30,
1995 and administered by Advisers.
The Fund attempts to maintain a stable net asset value of $1.00
per share (although there is no assurance that this will be
achieved).
Shares of the Fund may not be purchased directly. Shares may be
acquired only in exchange for Class II shares of other funds that
are members of the Franklin Templeton Funds, and as a result of
the reinvestment of income dividends and capital gains
distributions in additional shares of the Fund. All shares of the
Fund are acquired at the net asset value next determined after
receipt of an exchange request in proper form. Shares of the Fund
redeemed within 18 months of purchase of the Class II shares
which were exchanged for shares of the Fund are subject to a
1.00% contingent deferred sales charge. (See "How to Sell Shares
of the Fund" and "Exchange Privilege.")
GENERAL
Many funds in the Franklin Templeton Group have established a
multiple class fund structure, offering Class I and Class II
shares. This structure allows investors to consider which
schedule of sales charges, asset-based sales charges, and certain
other features best meet their investment needs. Generally, Class
II shares have lower initial sales charges than Class I shares
and higher yearly Rule 12b-1 fees. Also, contingent deferred
sales charges will generally be assessed on Class II shares
redeemed within eighteen months of purchase.
The Fund is intended to be a short-term or cash management
investment option for investors in Class II shares of other funds
in the Franklin Templeton Group. It is designed to be similar
and complementary to Clas II shares in certain respects, such as
in its method of distribution, including the absence of an
initial sales charge, the imposition of contingent deferred sales
charge ("CDSC") in certain circumstances and of Rule 12b-1
distribution plan.
INVESTMENT OBJECTIVES AND
POLICIES OF THE FUND
The investment objectives of the Fund are to obtain as high a
level of current income (in the context of the type of
investments available to the Fund) as is consistent with capital
preservation and liquidity. The Fund pursues its investment
objectives by investing all of its assets in the Portfolio, which
has the same investment objectives and substantially similar
policies and restrictions as the Fund. The Portfolio is a
separate diversified series of The Money Market Portfolios, an
open-end management investment company, managed by Advisers.
Shares of the Portfolio are acquired by the Fund at net asset
value with no sales charge. Accordingly, an investment in the
Fund is an indirect investment in the Portfolio. As with any
other investment, there is no assurance that the Fund's objective
will be attained.
SPECIAL INFORMATION REGARDING THE
FUND'S MASTER/FEEDER FUND STRUCTURE
The investment objectives of both the Fund and the Portfolio are
fundamental and may not be changed without shareholder approval.
The investment policies of the Fund, fundamental and non-
fundamental, are identical to those described herein with respect
to the Portfolio, except that in all cases, the Fund is permitted
to pursue such policies by investing in an open-end management
investment company with the same investment objectives and
substantially similar policies and limitations as the Fund. Any
additional exceptions are noted below. Information on
administration and expenses is included under "Administration of
the Fund." See the SAI for further information regarding the
Fund's and the Portfolio's investment restrictions.
An investment in the Fund may be subject to certain risks due to
the Fund's structure, such as the potential that upon redemption
by other future shareholders in the Portfolio, the Fund's
expenses may increase or the economies of scale which have been
achieved as a result of the structure may be diminished.
Institutional investors in the Portfolio that have a greater pro
rata ownership interest in the Portfolio than the Fund could have
effective voting control over the operation of the Portfolio.
Further, in the event that the shareholders of the Fund do not
approve a proposed future change in the Fund's objective or
fundamental policies, which has been approved for the Portfolio,
the Fund may be forced to withdraw its investment from the
Portfolio and seek another investment company with the same
objective and policies. If the Board of Trustees of the Fund
considers that it is in the best interest of the Fund to do so,
the Fund may withdraw its investment in the Portfolio at any
time. In that event, the Board of Trustees of the Fund would
consider what action to take, including the investment of all of
the assets of the Fund in another pooled investment entity having
substantially similar investment objectives and policies as the
Fund or the hiring of an investment advisor to manage the Fund's
investments. Either circumstance may cause an increase in Fund
expenses. Further, the Fund's structure is a relatively new
format which often results in certain operational and other
complexities. The Franklin organization, however, was one of the
first mutual fund complexes in the country to implement such a
structure, and the trustees do not believe that the additional
complexities outweigh the potential benefits to be gained by
shareholders.
The Franklin Group of Funds(Registered Trademark) has four other
funds which may invest in the Portfolio, three of which are
designed for institutional investors only. It is possible that in
the future other funds may be created which may likewise invest
in the Portfolio or existing funds may be restructured so that
they may invest in the Portfolio. Any such fund may be offered at
the same or a different public offering price; thus, an investor
in such fund may experience a different return from an investor
in another investment company which invests exclusively in the
Portfolio. The Fund or Advisers will forward to any interested
shareholder additional information, including a prospectus and
statement of additional information, if requested, regarding such
other institutions through which they may make investments in the
Portfolio. Investors interested in obtaining information about
such funds may contact the departments listed under "How to Get
Information Regarding an Investment in the Fund." The Portfolio
is a series of Money Market, a management investment company
registered under the 1940 Act. Money Market is a Delaware
business trust organized on July 10, 1992 and is authorized to
issue an unlimited number of shares of beneficial interest with a
par value of $.01 per share. All shares have one vote and, when
issued, are fully paid, non-assessable, and redeemable. Money
Market currently issues shares in two separate series; however,
additional series may be added in the future by the Board of
Trustees of Money Market, the assets and liabilities of which
will be separate and distinct from any other series.
Whenever the Fund, as an investor in the Portfolio, is asked to
vote on a matter relating to the Portfolio, the Fund will hold a
meeting of Fund shareholders and will cast its votes in the same
proportion as the Fund's shareholders have voted.
GENERAL
In accordance with procedures adopted pursuant to Rule 2a-7 under
the 1940 Act, the Portfolio limits its investments to those U.S.
dollar denominated instruments which the Board of Trustees of
Money Market determines present minimal credit risks and which
are, as required by the federal securities laws, rated in one of
the two highest rating categories as determined by nationally
recognized statistical rating agencies, or which are unrated and
of comparable quality, with remaining maturities of 397 calendar
days or less ("Eligible Securities"). The Portfolio maintains a
dollar weighted average maturity of the securities in its
portfolio of 90 days or less. The Portfolio will not invest more
than 5% of its total assets in Eligible Securities of a single
issuer, other than U.S. government securities, rated in the
highest category by the requisite number of rating agencies,
except that the Portfolio may exceed that limit as permitted by
Rule 2a-7 for a period of up to three business days; and the
Portfolio will not invest (a) the greater of 1% of the
Portfolio's total assets or $1 million in Eligible Securities
issued by a single issuer rated in the second highest category
and (b) more than 5% of its total assets in Eligible Securities
of all issuers rated in the second highest category. These
procedures are a fundamental policy of the Portfolio and the
Fund, except to the extent that the Fund invests all of its
assets in another registered investment company with
substantially similar investment objectives and policies as the
Fund.
Because the Portfolio limits its investments to high quality
securities, its portfolio will generally earn lower yields than
if the Portfolio purchased securities with a lower rating and
correspondingly greater risk.
As a matter of fundamental policy (which may not be changed
without shareholder approval), the Portfolio may not purchase any
securities other than obligations of the U.S. government, its
agencies or instrumentalities, if, immediately after such
purchase, more than 5% of the value of the Portfolio's total
assets would be invested in securities of any one issuer with
respect to 75% of the Portfolio's total assets, or more than 10%
of the outstanding voting securities of any one issuer would be
owned by the Portfolio, except to the extent that the Fund
invests all of its assets in another registered investment
company having substantially similar investment objectives and
policies as the Fund. As stated above in accordance with
procedures adopted pursuant to Rule 2a-7, the Portfolio will not
invest more than 5% of the Portfolio's total assets in Eligible
Securities of a single issuer, other than U.S. government
securities. The Portfolio is not limited with respect to its
investments in securities which are otherwise consistent with its
investment objective, which have a floating or variable rate of
interest.
U.S. GOVERNMENT SECURITIES
The Portfolio may invest without limit in U.S. government
securities, which consist of marketable fixed, floating and
variable rate securities issued or guaranteed by the U.S.
government, its agencies, or by various instrumentalities which
have been established or sponsored by the U.S. government ("U.S.
government securities"). Certain of these obligations, including
U.S. Treasury bills, notes and bonds and securities of the
Government National Mortgage Association (popularly called
"GNMAs" or "Ginnie Maes") and the Federal Housing Administration,
are issued or guaranteed by the U.S. government or carry a
quarantee that is supported by the full faith and credit of the
U.S. government. Other U.S. government securities are issued or
guaranteed by federal agencies or government-sponsored
enterprises and are not direct obligations of the U.S.
government, but involve sponsorship or guarantees by government
agencies or enterprises. These obligations include securities
that are supported by the right of the issuer to borrow from the
U.S. Treasury, such as obligations of the Federal Home Loan Bank,
and securities that are supported by the credit of the
instrumentality, such as Federal National Mortgage Association
("FNMA") bonds. In this connection, the Portfolio may use any
portion of its assets invested in U.S. government securities to
concurrently enter into repurchase agreements with respect to
such securities.
BANK OBLIGATIONS
The Portfolio may also invest without limit in bank obligations
or instruments secured by bank obligations. Such instruments may
include fixed, floating or variable rate certificates of deposit,
letters of credit, time deposits, and bankers' acceptances issued
by banks and savings institutions with assets of at least one
billion dollars. Bank obligations may be obligations of U.S.
banks, foreign branches of U.S. banks (referred to as "Eurodollar
Investments"), U.S. branches of foreign banks (referred to as
"Yankee Dollar Investments") and foreign branches of foreign
banks ("Foreign Bank Investments"). When investing in a bank
obligation issued by a branch, the parent bank must have assets
of at least five billion dollars. The Portfolio may invest only
up to 25% of its assets in obligations of foreign branches of
U.S. or foreign banks. The Portfolio may, however, invest more
than 25% of its assets in certain domestic bank obligations.
Investments in obligations of U.S. branches of foreign banks,
which are considered domestic banks, may only be made if such
branches have a federal or state charter to do business in the
U.S. and are subject to U.S. regulatory authorities. See
"Investment Objective and Policies of the Fund - Investment Risk
Considerations" for more information regarding these investments.
Time Deposits are non-negotiable deposits maintained in a foreign
branch of a U.S. or foreign banking institution for a specified
period of time at a stated interest rate. The Portfolio may not
invest more than 10% of its assets in Time Deposits with
maturities in excess of seven calendar days.
COMMERCIAL PAPER
The Portfolio may also invest without limit in commercial paper
of domestic or foreign issuers which is considered by the
Portfolio to present minimal credit risks and which is rated
within the two highest rating categories by NRSROs or, if
unrated, has been determined by the investment manager to be of
comparable quality to instruments that are Eligible Securities
pursuant to procedures approved by Money Market's Board of
Trustees. Commercial paper obligations may include variable
amount master demand notes that are obligations which permit the
investment of fluctuating amounts by the Portfolio at varying
rates of interest pursuant to direct arrangements between the
Portfolio, as lender, and the borrower. These notes permit daily
changes in the amounts borrowed. The Portfolio has the right to
increase the amount provided by the note agreement, or to
decrease the amount, and the borrower may repay up to the full
amount of the note without penalty. The borrower is often a large
industrial or finance company which also issues commercial paper.
Typically, these notes provide that the interest rate is set
daily by the borrower; the rate is usually the same or similar to
the interest on commercial paper being issued by the borrower.
Because variable amount master demand notes are direct lending
arrangements between the lender and the borrower, it is not
generally contemplated that such instruments will be traded, and
there is no secondary market for these notes, although they are
redeemable (and thus immediately repayable by the borrower) at
face value plus accrued interest at any time. Accordingly, the
Portfolio's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. In connection
with master demand note arrangements, the Portfolio's investment
manager will consider earning power, cash flow and other
liquidity ratios of the issuer. The Portfolio, which has no
specific limits on aggregate investments in master demand notes,
will invest in notes of only U.S. issuers. While master demand
notes, as such, are not typically rated by credit ratings
agencies, if not so rated, the Portfolio may invest in them only
if, at the time of an investment, the issuer meets the criteria
set forth above for all other commercial paper issuers.
CORPORATE OBLIGATIONS
The corpoate obligations which the Portfolio may purchase are
fixed, floating and variable rate bonds, debentures or notes of
domestic issuers which are considered by the Portfolio to be
Eligible Securities. The Portfolio is not restricted in the
aggregate amount of its assets that may be invested in such
securities. Such obligations must mature in 397 calendar days or
less. Generally speaking, the higher an instrument is rated, the
greater its safety and the lower its yield.
(For informational purposes, included in the SAI is an
explanation of ratings by two NRSROs, Standard & Poor's
Corporation and Moody's Investors Service.)
MUNICIPAL SECURITIES
The Portfolio may invest up to 10% of its assets in taxable
municipal securities, issued by or on behalf of states,
territories and possessions of the U.S. and the District of
Columbia and their political subdivisions, agencies, and
instrumentalities, the interest on which is not exempt from
federal income tax, which are considered by the Portfolio to
present minimal credit risks and which are rated within the two
highest rating categories by nationally recognized statistical
rating organizations or, if unrated, have been determined by
Advisers to be of comparable quality to instruments that are
Eligible Securities pursuant to procedures approved by the Money
Market's Board of Trustees. Generally, municipal securities are
used to raise money for various public purposes such as
constructing public facilities and making loans to public
institutions. Taxable municipal bonds are generally issued to
provide funding for privately operated facilities.
REPURCHASE AGREEMENTS
The Portfolio may engage in repurchase transactions, in which the
Portfolio purchases a U.S. government security subject to resale
to a bank or dealer at an agreed-upon price and date. The
transaction requires the collateralization of the seller's
obligation by the transfer of securities with an initial market
value, including accrued interest, equal to at least 102% of the
dollar amount invested by the Portfolio in each agreement, with
the value of the underlying security marked-to-market daily to
maintain coverage of at least 100%. A default by the seller might
cause the Portfolio to experience a loss or delay in the
liquidation of the collateral securing the repurchase agreement.
The Portfolio might also incur disposition costs in liquidating
the collateral. The Portfolio, however, intends to enter into
repurchase agreements only with financial institutions such as
broker-dealers and banks which are deemed creditworthy by the
Portfolio's investment manager. A repurchase agreement is deemed
to be a loan by the Portfolio under the 1940 Act. The U.S.
government security subject to resale (the collateral) will be
held on behalf of the Portfolio by a custodian approved by the
Portfolio's Board of Trustees and will be held pursuant to a
written agreement.
ILLIQUID INVESTMENTS
It is the policy of the Portfolio that illiquid securities
(securities that cannot be disposed of within seven days in the
normal course of business at approximately the amount at which
the Portfolio has valued the securities) may not constitute, at
the time of purchase, more than 10% of the value of the total net
assets of the Portfolio.
OTHER POLICIES
The Portfolio may borrow from banks for extraordinary or
emergency purposes only and pledge its assets for such loans in
amounts up to 5% of the Portfolio's total assets. No new
investments will be made by the Portfolio while any outstanding
loans exceed 5% of its total assets.
Depending on its view of market conditions and cash requirements,
the Portfolio may or may not hold securities purchased until
maturity. The yield on certain instruments held by the Portfolio
may decline if sold prior to maturity.
Whenever the Portfolio's investment manager believes market
conditions are such that yields could be increased by actively
trading the portfolio securities to take advantage of short-term
market variations, the Portfolio may do so without restriction or
limitation. The Portfolio may not invest in securities other than
the types of securities listed above and is subject to other
specific investment restrictions as detailed under "Additional
Information Regarding the Fund's Investment Objective and
Policies" in the SAI.
Consistent with procedures approved by the Board of Trustees and
subject to the following conditions, the Portfolio may lend its
portfolio securities to qualified securities dealers or other
institutional investors, provided that such loans do not exceed
25% of the value of the Portfolio's total assets at the time of
the most recent loan. The borrower must deposit with the
Portfolio's custodian collateral with an initial market value at
least 102% of the initial market value of the securities loaned,
including any accrued interest, with the value of the collateral
and loaned securities marked-to-market daily to maintain such
collateral coverage. Such collateral shall consist of cash,
securities issued by the U.S. Government, its agencies or
instrumentalities, or irrevocable letters of credit. The lending
of securities is a common practice in the securities industry.
The Portfolio engages in security loan arrangements with the
primary objective of increasing the Portfolio's income either
through investing the cash collateral in short-term interest
bearing obligations or by receiving a loan premium from the
borrower. Under the securities loan agreement, the Portfolio
continues to be entitled to all dividends or interest on any
loaned securities. As with any extension of credit, there are
risks of delay in recovery and loss of rights in the collateral
should the borrower of the security fail financially.
The Fund may not purchase securities of any issuer having a
record, together with predecessors, of less than three years'
continuous operation, if, immediately after such purchase, more
than 5% of the Fund's total assets taken at market value would be
invested in such securities, except to the extent that all or
substantially all of the Fund's assets may be invested in another
registered investment company having substantially similar
investment objectives and policies as the Fund.
RISK CONSIDERATIONS
Any of the Portfolio's Eurodollar Investments, Yankee Dollar
Investments, Foreign Bank Investments or investments in
commercial paper of foreign issuers will involve risks that are
different from investments in obligations of domestic entities.
These risks may include future unfavorable political and economic
developments, possible withholding taxes, seizure of foreign
deposits, currency controls, interest limitations, or other
governmental restrictions which might affect the payment of
principal or interest on securities the Portfolio holds. In
addition, there may be less publicly available information
regarding such foreign banks or foreign issuers of commercial
paper.
The Portfolio may also purchase and sell securities on a "when-
issued" and "delayed delivery" basis. These transactions are
subject to market fluctuation and the value at delivery may be
more or less than the purchase price. When the Portfolio is the
buyer in such a transaction, it will maintain, in a segregated
account with its custodian, cash or high-grade marketable
securities having an aggregate value equal to the amount of such
purchase commitments until payment is made. To the extent the
Portfolio engages in when-issued and delayed delivery
transactions, it will do so for the purpose of acquiring
securities for its portfolio consistent with its investment
objectives and policies and not for the purpose of investment
leverage. In when-issued and delayed delivery transactions, the
Portfolio relies on the seller to complete the transaction. The
seller's failure to complete the transaction may cause the
Portfolio to miss a price or yield considered to be advantageous.
Securities purchased on a when-issued or delayed delivery basis
do not generally earn interest until their scheduled delivery.
Also see "Special Information Regarding the Fund's Master/Feeder
Fund Structure."
ADMINISTRATION OF THE FUND
The Fund's Board of Trustees has the primary responsibility for
the overall management of the Fund and for electing the officers
of the Trust who are responsible for administering its day-to-day
operations. For information concerning the officers and Trustees
of the Fund and the officers and trustees of Money Market, see
"Officers and Trustees" in the SAI. The Board of Trustees, with
all disinterested trustees as well as the interested trustees
voting in favor, has adopted written procedures designed to deal
with potential conflicts of interest which may arise from the
Fund and Money Market having substantially the same Boards of
Trustees. The procedures call for an annual review of the Fund's
relationship with the Portfolio, and in the event a conflict is
deemed to exist, the boards may take action, up to and including
the establishment of a new board of trustees. The Board of
Trustees has determined that there are no conflicts of interest
presented by this arrangement at the present time. See "Appendix"
in the Fund's SAI for a summary of the conflict of interest
procedures.
Advisers serves as the Fund's administrator and as the
Portfolio's investment manager. Advisers is a wholly-owned
subsidiary of Franklin Resources, Inc. ("Resources"), a publicly
owned holding company, the principal shareholders of which are
Charles B. Johnson and Rupert H. Johnson, Jr., who own
approximately 20% and 16%, respectively, of Resources'
outstanding shares. Resources is engaged in various aspects of
the financial services industry through its various subsidiaries
(the "Franklin Templeton Group"). Advisers acts as investment
manager or administrator to 34 U.S. registered investment
companies (112 separate series) with aggregate assets of over $75
billion.
Advisers serves as the Fund's administrator pursuant to an
administration agreement, effective May 1, 1995. Pursuant to the
administration agreement, Advisers provides various
administrative, statistical, and other services to the Fund in
return for a monthly administration fee at the annual rate of
91/200 of 1% for the first $100 million of the Fund's average
daily net assets; 33/100 of 1% of the Fund's net assets over $100
million up to and including $250 million; and 7/25 of 1% of the
Fund's net assets in excess of $250 million.
The Fund is responsible for its own operating expenses including,
but not limited to, Advisers' administration fee; taxes, if any;
custodian, legal and auditing fees; fees and expenses of trustees
who are not members of, affiliated with or interested persons of
Advisers; salaries of any personnel not affiliated with Advisers;
insurance premiums; trade association dues; expenses of obtaining
quotations for calculating the value of the Fund's net assets;
printing and other expenses relating to the Fund's operations;
filing fees; brokerage fees and commissions, if any; costs of
registering and maintaining registration of the Fund's shares
under federal and state securities laws; plus any extraordinary
and non-recurring expenses which are not expressly assumed by
Advisers.
Advisers has voluntarily agreed in advance to waive a portion of
its administrative fee and make certain payments, if necessary,
to ensure that total aggregate operating expenses of the Fund are
not higher than if the Fund were not to invest all of its assets
in the Portfolio. This action by Advisers may be terminated at
any time.
The Portfolio has a management agreement with Advisers which
provides for the supervision and implementation of the
Portfolio's investment activities and certain administrative
services and facilities which are necessary to conduct the
Portfolio's business.
Under the management agreement with Advisers, the Portfolio is
obligated to pay Advisers a fee equal to an annual rate of 15/100
of 1% of the Portfolio's average net assets. The fee is computed
and paid monthly based on the average daily net assets of the
Portfolio during the month. The Portfolio is responsible for its
own operating expenses, including, but not limited to: Advisers'
fee; taxes, if any; legal and auditing fees; fees and costs of
its custodian; the fees and expenses of trustees who are not
members of, affiliated with or interested persons of Advisers;
salaries of any personnel not affiliated with Advisers; insurance
premiums, trade association dues, and expenses of obtaining
quotations for calculating the value of the Portfolio's net
assets; printing and other expenses relating to the Portfolio's
operations; filing fees; brokerage fees and commissions, if any;
costs of registering and maintaining registration of the
Portfolio's shares under federal and state securities laws; plus
any extraordinary and non-recurring expenses.
Advisers has limited its management fees and has assumed
responsibility for making payments to offset certain operating
expenses otherwise payable by the Portfolio. This action by
Advisers to limit its management fees and to assume
responsibility for payment of the expenses related to operations
of the Portfolio may be terminated by Advisers at any time.
For the fiscal years ended June 30, 1993 and 1994, Advisers has
agreed to waive management fees of $42,713, and $47,631,
respectively, to reduce the operating expenses of the Portfolio.
The actual management fees charged to the Portfolio for the
fiscal years ended June 30, 1993 and 1994, were $229,483, and
$415,665, respectively. This action by Advisers may be terminated
at any time.
Fund shareholders will bear a portion of the Portfolio's
operating expenses, including its management fee, to the extent
that the Fund, as a shareholder of the Portfolio, bears such
expenses. The portion of the Portfolio's expenses borne by the
Fund is dependent upon the number of other shareholders of the
Portfolio, if any. Advisers may, but is not obligated to, waive
all or any portion of the management fee due from the Portfolio
or the administration fee due from the Fund. This arrangement may
be terminated by Advisers at any time.
It is not anticipated that the Portfolio will incur a significant
amount of brokerage expenses because short-term money market
instruments are generally traded on a "net" basis, that is, in
principal transactions without the addition or deduction of
brokerage commissions or transfer taxes. To the extent that the
Portfolio does participate in transactions involving brokerage
commissions, it is Advisers' responsibility to select brokers
through which such transactions will be effected. Advisers tries
to obtain the best execution on all such transactions. If it is
felt that more than one broker is able to provide the best
execution, Advisers will consider the furnishing of quotations
and of other market services, research, statistical and other
data for Advisers and its affiliates, as well as the sale of
shares of the Fund, as factors in selecting a broker. Further
information is included under "Policies Regarding Brokers Used on
Portfolio Transactions" in the Fund's SAI.
Shareholder accounting and many of the clerical functions for the
Fund are performed by Franklin/Templeton Investor Services, Inc.
("Investor Services" or "Shareholder Services Agent"), in its
capacity as transfer agent and dividend-paying agent. Investor
Services is a wholly-owned subsidiary of Resources.
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares dividends for each day that the Fund's net
asset value is calculated, payable to shareholders of record as
of the close of business the preceding day. The amount of
dividends may fluctuate from day to day and dividends may be
omitted on some days, depending on changes in the factors that
comprise the Fund's net investment income.
The Fund does not pay "interest" to its shareholders, nor is any
amount of dividends or return guaranteed in any way.
Dividends are automatically reinvested daily in the form of
additional shares of the Fund at the net asset value per share at
the close of business each day.
The Fund's daily dividend consists of the income dividends paid
by the Portfolio. The Portfolio's daily dividend includes accrued
interest and any original issue and market discount, plus or
minus any gain or loss on the sale of portfolio securities and
changes in unrealized appreciation or depreciation in portfolio
securities (to the extent required to maintain a stable net asset
value per share), less amortization of any premium paid on the
purchase of portfolio securities and the estimated expenses of
the Fund.
The federal income tax treatment of dividends and distributions
is the same whether received in cash or reinvested in Fund
shares. The SAI includes a further discussion of distributions.
DIVIDENDS IN CASH
Shareholders may request to have their dividends paid out monthly
in cash by filing written instructions with Investor Services.
For such shareholders, the shares reinvested and credited to
their account during the month will be redeemed as of the close
of business on the last business day of the month and the
proceeds will be paid to them in cash. By completing the "Special
Payment Instructions for Dividends" section of the Shareholder
Application included with this Prospectus, a shareholder may
direct the selected distributions to another one of the Franklin
Templeton Funds, to another person, or directly to a checking
account. If the bank at which the account is maintained is a
member of the Automated Clearing House, the payments may be made
automatically by electronic funds transfer. If this last option
is requested, the shareholder should allow at least 15 days for
initial processing. Dividends which may be paid in the interim
will be sent to the address of record. Additional information
regarding automated fund transfers may be obtained from
Franklin's Shareholder Services Department.
TAXATION OF THE FUND AND ITS SHAREHOLDERS
The following discussion reflects some of the tax considerations
that affect mutual funds and their shareholders. Additional
information on tax matters relating to the Fund and its
shareholders is included in the section entitled "Additional
Information Regarding Distributions and Taxes" in the SAI.
The Fund intends to qualify and elect to be treated as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). The Portfolio
intends to continue to qualify for treatment as a regulated
investment company under Subchapter M of the Code. By
distributing all of their income and meeting certain other
requirements relating to the sources of their income and
diversification of their assets, the Fund and the Portfolio will
not be liable for federal income or excise taxes.
For federal income tax purposes, any income dividends which the
shareholder receives from the Fund, as well as any distributions
derived from the excess of net short-term capital gain over net
long-term capital loss, are treated as ordinary income whether
the shareholder has elected to receive them in cash or in
additional shares.
The Fund will inform shareholders of the source of their
dividends and distributions at the time they are paid and will,
promptly after the close of each calendar year, advise them of
the tax status for federal income tax purposes of such dividends
and distributions.
Shareholders should consult their tax advisors with respect to
the applicability of state and local intangible property or
income taxes to their shares in the Fund and to distributions and
redemption proceeds received from the Fund.
Shareholders who are not U.S. persons for purposes of federal
income taxation should consult with their financial or tax
advisors regarding the applicability of U.S. withholding or other
taxes to distributions received by them from the Fund and the
application of foreign tax laws to these distributions.
HOW TO BUY SHARES OF THE FUND
Shares of the Fund may not be purchased directly from the Fund or
Distributors. Shares may be acquired only in exchange for Class
II shares of other funds that are members of the Franklin
Templeton Funds sold subject to a contingent deferred sales
charge. Shares may also be acquired as result of the
reinvestment of income dividends and capital gains distributions
in additional shares of the Fund. All shares of the Fund are
acquired at the net asset value next determined after receipt of
an exchange request in proper form and are subject to a 1.00%
contingent deferred sales charge if they are redeemed within 18
months of purchase of the Class II shares which were exchanged
for shares of the Fund. See "Contingent Deferred Sales Charge",
under "How to Sell Shares of the Fund." The minimum initial
investment is $100 and subsequent investments must be $25 or
more.
No drafts (checks) may be written on Fund accounts. No other
money market funds are available for Class II shareholders for
exchange purposes. The Fund and Distributors reserve the right to
reject any order for the acquisition of shares of the Fund. In
addition, the offering of shares of the Fund may be suspended by
the Fund at any time and resumed at any time thereafter. No
share certificates will be issued.
Securities laws of states in which the Fund's shares are offered
for sale may differ from the interpretations of federal law, and
banks and financial institutions offering Fund shares may be
required to register as dealers pursuant to state law.
If transactions in Fund shares with the assistance of certain
banks were deemed to be an impermissible activity for such bank
under the Glass-Steagall Act, or other federal laws, such
activities would likely be discontinued by such bank. Investors
utilizing such bank assistance would then be able to seek other
avenues to invest in Fund shares, such as securities dealers
registered with the SEC or from the Fund directly.
Plan of Distribution
The Fund has adopted a Plan of Distribution (the "Plan") pursuant
to Rule 12b-1 under the Investment Company Act of 1940. Any
portion of fees remaining after distribution to securities
dealers up to the maximum amount permitted under the Plan may be
used by the Fund to pay Distributors for routine ongoing
promotion and distribution expenses. Such expenses may include,
but are not limited to, the printing of prospectuses and reports
used for sales purposes, expenses of preparing and distributing
sales literature and related expenses, advertisements, and other
distribution-related expenses, including a prorated portion of
Distributors' overhead expenses attributable to the distribution
of Fund shares, as well as any distribution or service fees paid
to securities dealers or their firms or others who have executed
a servicing agreement with the Fund, Distributors or its
affiliates.
Under the Plan, the Fund is permitted to pay to Distributors or
others, annual distribution fees, payable quarterly, of .50% of
the Fund's daily net assets per annum, in order to compensate
Distributors or others for providing distribution and related
services and bearing certain expenses of the Fund. All expenses
of distribution and marketing and related services over that
amount will be borne by Distributors, or others who have incurred
them, without reimbursement by the Fund. In addition to this
amount, quarterly under the Plan, the Fund shall pay an amount
equal to .15% per annum of the Fund's average daily net assets as
a servicing fee. This fee will be used to pay dealers or others
for, among other things, assisting in establishing and
maintaining customer accounts and records; assisting with
purchase and redemption requests; receiving and answering
correspondence; monitoring dividend payments from the Fund on
behalf of customers, and similar activities related to furnishing
personal services and maintaining shareholder accounts.
During the first year after the purchase of the Class II shares
which are exchanged for shares of the Fund, Distributors will
keep a portion of the Plan fees assessed on Fund shares to
partially recoup fees Distributors pays to securities dealers.
The Plan also covers any payments to or by the Fund, Advisers,
Distributors, or other parties on behalf of the Fund, Advisers or
Distributors, to the extent such payments are deemed to be for
the financing of any activity primarily intended to result in the
sale of shares issued by the Fund within the context of Rule 12b-
1. The payments under the Plan are included in the maximum
operating expenses which may be borne by the Fund. For more
information, including a discussion of the board's policies with
regard to the amount of fees, please see the SAI.
HOW TO SELL SHARES OF THE FUND
All or any part of a shareholder's investment may be converted
into cash by redeeming shares in any one or more of the methods
discussed below on any day the New York Stock Exchange (the
"Exchange") is open for trading. All shares are subject to a
1.00% contingent deferred sales charge if they are redeemed
within 18 months of purchase of the Class II shares which were
exchanged for shares of the Fund. See "Contingent Deferred Sales
Charge", herein. Regardless of the method of redemption, payment
for the shareholder's redeemed shares will be sent within seven
days after receipt of the redemption request in proper form.
Shareholders are requested to provide a telephone number(s) where
they may be reached during business hours, or in the evening if
preferred. Investor Services' ability to contact a shareholder
promptly when necessary will speed the processing of the
redemption.
Retirement account liquidations require the completion of certain
additional forms to ensure compliance with Internal Revenue
Service ("IRS") regulations. To liquidate a retirement account, a
shareholder or the shareholder's securities dealer may call
Franklin's Retirement Plans Department to obtain the necessary
forms.
Shares may be redeemed in any of the following ways:
1. BY TELEPHONE
A shareholder may redeem shares by telephoning the Fund at 1-
800/632-2301. Payment of redemption requests of $1,000 or less
(once per business day) will be sent by mail to the shareholder's
address as reflected on the Fund's records. For payments over
$1,000, the shareholder must complete the "Wire Redemptions
Privilege" section of the Shareholder Application. Proceeds will
then be wired directly to the commercial bank or brokerage firm
designated by the shareholder. Wires will not be sent for
redemption requests of $1,000 or less. Shareholders may have
redemption proceeds of over $1,000, up to $50,000 per day per
Fund account, subject to the Restricted Account exception noted
under "Telephone Transactions -- Restricted Accounts," sent
directly to their address of record by filing a completed
Franklin Templeton Telephone Redemption Authorization Agreement
(the "Agreement") included with this Prospectus. INFORMATION MAY
ALSO BE OBTAINED BY WRITING TO THE FUND OR INVESTOR SERVICES AT
THE ADDRESS SHOWN ON THE COVER OR BY CALLING THE NUMBER ABOVE.
THE FUND AND INVESTOR SERVICES WILL EMPLOY REASONABLE PROCEDURES
TO CONFIRM THAT INSTRUCTIONS GIVEN BY TELEPHONE ARE GENUINE. THE
FUND AND INVESTOR SERVICES MAY BE LIABLE FOR ANY LOSSES DUE TO
UNAUTHORIZED OR FRAUDULENT INSTRUCTIONS ONLY IF SUCH REASONABLE
PROCEDURES ARE NOT FOLLOWED. SHAREHOLDERS, HOWEVER, BEAR THE RISK
OF LOSS IN CERTAIN CASES AS DESCRIBED UNDER "TELEPHONE
TRANSACTIONS - VERIFICATION PROCEDURES."
Telephone redemption requests received before 3:00 p.m. Pacific
time on any business day will be processed that same day. The
redemption check will be sent within seven days, made payable to
all the registered owners on the account, and will be sent only
to the address of record. Wire payments will be transmitted the
next business day following receipt after the scheduled close of
the Exchange of a request for redemption in proper form.
Shareholders may wish to allow for longer processing time if they
want to assure that redemption proceeds will be available at a
specific time for a specific transaction. Shareholders may be
able to have redemption proceeds wired to an escrow account the
same day, provided that the request is received prior to 9:00
a.m. Pacific time.
Redemption instructions must include the shareholder's name and
account number and be called to the Fund. Redemption requests by
telephone will not be accepted within 30 days following an
address change by telephone. In that case, a shareholder should
follow the other redemption procedures set forth in this
Prospectus. Institutional accounts which wish to execute
redemptions in excess of $50,000 per day must complete an
Institutional Telephone Privileges Agreement which is available
from Franklin's Institutional Services Department by telephoning
1-800/321-8563.
During periods of drastic economic or market changes, it is
possible that the telephone redemption privilege may be difficult
to implement. In this event, shareholders should follow the other
redemption procedures discussed in this Prospectus. The telephone
redemption privilege may be modified or discontinued by the Fund
at any time upon 60 days' notice to shareholders.
2. BY MAIL
A shareholder may redeem all or a portion of his shares by
sending a letter to Investor Services, at the address shown on
the back cover of this Prospectus, requesting redemption.
IMPORTANT THINGS TO REMEMBER
WHEN REDEEMING SHARES
When selling Fund shares, the terms of the redemption request
will determine how the contingent deferred sales charge, if any,
is deducted. Redemption orders for a specific DOLLAR AMOUNT will
result in the redemption of enough shares to cover the contingent
deferred sales charge, if any, and the requested dollar amount.
If, however, a specific SHARE AMOUNT is requested, the contingent
deferred sales charge will be deducted from the amount of shares
requested to be redeemed. See the discussion of Contingent
Deferred Sales Charges which follows for more information.
Written requests for redemption must be signed by all registered
owners.
TO BE CONSIDERED IN PROPER FORM, SIGNATURE(S) MUST BE GUARANTEED
IF THE REDEMPTION REQUEST INVOLVES ANY OF THE FOLLOWING:
(1) the proceeds of the redemption are over $50,000;
(2) the proceeds (in any amount) are to be paid to someone other
than the registered owner(s) of the account;
(3) the proceeds (in any amount) are to be sent to any address
other than the shareholder's address of record, preauthorized
bank account or brokerage firm account; or
(4) the Fund or Investor Services believes that a signature
guarantee would protect against potential claims based on the
transfer instructions, including, for example, when (a) the
current address of one or more joint owners of an account cannot
be confirmed, (b) multiple owners have a dispute or give
inconsistent instructions to the Fund, (c) the Fund has been
notified of an adverse claim, (d) the instructions received by
the Fund are given by an agent, not the actual registered owner,
(e) the Fund determines that joint owners who are married to each
other are separated or may be the subject of divorce proceedings,
or (f) the authority of a representative of a corporation,
partnership, association, or other entity has not been
established to the satisfaction of the Fund.
Signature(s) must be guaranteed by an "eligible guarantor
institution" as defined under Rule 17Ad-15 under the Securities
Exchange Act of 1934. Generally, eligible guarantor institutions
include (1) national or state banks, savings associations,
savings and loan associations, trust companies, savings banks,
industrial loan companies and credit unions; (2) national
securities exchanges, registered securities associations and
clearing agencies; (3) securities dealers which are members of a
national securities exchange or a clearing agency or which have
minimum net capital of $100,000; or (4) institutions that
participate in the Securities Transfer Agent Medallion Program
("STAMP") or other recognized signature guarantee medallion
program. A notarized signature will not be sufficient for the
request to be in proper form.
Liquidation requests of corporate, partnership, trust and
custodianship accounts, and accounts under court jurisdiction,
require the following documentation to be in proper form:
Corporation - (1) Signature guaranteed letter of instruction from
the authorized officer(s) of the corporation and (2) a corporate
resolution.
Partnership - (1) Signature guaranteed letter of instruction from
a general partner and (2) pertinent pages from the partnership
agreement identifying the general partners or a certification for
a partnership agreement.
Trust - (1) Signature guaranteed letter of instruction from the
trustee(s) and (2) a copy of the pertinent pages of the trust
document listing the trustee(s) or a Certification for Trust if
the trustee(s) are not listed on the account registration.
Custodial (other than a retirement account) - Signature
guaranteed letter of instruction from the custodian.
Accounts under court jurisdiction - Check court documents and the
applicable state law since these accounts have varying
requirements, depending upon the state of residence.
CONTINGENT DEFERRED SALES CHARGE
Unless one of the exceptions described below applies, Fund shares
redeemed within eighteen months of their purchase of the Class II
shares which were exchanged for shares of the Fundwill generally
be assessed a contingent deferred sales charge of 1.00%. A
contingent deferred sales charge will not be assessed on Fund
shares held more than eighteen months from the purchase of the
Class II shares which were exchanged for shares of the Fund, or
on shares originally derived from reinvestment of dividends or
capital gains distributions.
In determining whether a contingent deferred sales charge is
applicable, a calculation is used which determines the lowest
possible charge against the shareholder's investment in the Fund.
It will be assumed that a redemption is made (i) first from
amounts representing capital appreciation of shares purchased
that are still subject to the contingent deferred sales charge,
(ii) then from shares derived from reinvestment of dividends and
distributions, (iii) then from shares held by the shareholder
which are no longer subject to a contingent deferred sales
charge, and iv) finally from shares subject to a contingent
deferred sales charge, on a first-in, first-out basis. For tax
purposes, a contingent deferred sales charge is treated as either
a reduction in redemption proceeds or an adjustment to the cost
basis of the shares redeemed.
All investments made during a calendar month, regardless of when
during the month the investment occurred, will age one month on
the last day of that month and each subsequent month during the
time such investment remains outstanding in Class II shares or in
the Fund. If a shareholder exchanges Class II shares of a fund
for the same class of shares in another fund, or the Fund, no
contingent deferred sales charge will be assessed in connection
with the exchange. Shares redeemed after eighteen months
(including periods during which such assets were invested in
Class II shares of other funds), are no longer subject to a
contingent deferred sales charge. See "Exchange Privilege" below
for more information regarding exchanges.
The contingent deferred sales charge is waived, as applicable,
for: exchanges; any account fees; distributions to participants
or to beneficiaries thereof in Trust Company qualified retirement
plans due to death, disability or attainment of age 59 1/2; tax-
free returns of excess contributions to employee benefit plans;
distributions from employee benefit plans, including those due to
termination or plan transfer; redemptions through a Systematic
Withdrawal Plan of up to 1% monthly of an account's net asset
value (3% quarterly, 6% semiannually or 12% annually);
redemptions initiated by the Fund due to a shareholder's account
falling below the minimum specified account size; redemption
following the death of the shareholder or beneficial owner.
ADDITIONAL INFORMATION REGARDING REDEMPTIONS
For any information required about a proposed liquidation, a
shareholder may call Franklin's Shareholder Services Department
or the securities dealer may call Franklin's Dealer Services
Department.
Written requests for redemption should be sent to the Fund or
Investor Services at the address shown on the back cover of this
Prospectus.
Payment for written requests for redemption will be sent within
seven days after receipt of the request in proper form.
Redemptions will be made in cash at the net asset value per share
next determined after receipt by the Fund of a redemption request
in proper form, signature guarantees, and other documentation as
may be required by Investor Services. The amount received upon
redemption may be more or less than the shareholder's original
investment. Redemptions may be suspended under certain limited
circumstances pursuant to rules adopted by the SEC.
Wiring of redemption proceeds is a special service made available
to shareholders whenever possible. The offer of this service,
however, does not bind the Fund to meet any redemption request by
wire or in less than the seven-day period prescribed by law.
Neither the Fund nor its agents shall be liable to any
shareholder or other person for a redemption payment by wire
which for any reason may not be processed as described in this
section.
OTHER PROGRAMS AND PRIVILEGES
AVAILABLE TO FUND SHAREHOLDERS
CERTAIN OF THE PROGRAMS AND PRIVILEGES DESCRIBED IN THIS SECTION
MAY NOT BE AVAILABLE DIRECTLY FROM THE FUND TO SHAREHOLDERS WHOSE
SHARES ARE HELD, OF RECORD, BY A FINANCIAL INSTITUTION OR IN A
"STREET NAME" ACCOUNT, OR NETWORKED ACCOUNT THROUGH NATIONAL
SECURITIES CLEARING CORPORATION ("NSCC") (SEE THE SECTION
CAPTIONED "ACCOUNT REGISTRATIONS" IN THIS PROSPECTUS).
CONFIRMATIONS
A confirmation statement will be sent to each shareholder monthly
to reflect the daily dividends reinvested, as well as after each
transaction which affects the shareholder's account. This
statement will also show the total number of Fund shares owned by
the shareholder, including the number of shares in "plan balance"
for the account of the shareholder.
SYSTEMATIC WITHDRAWAL PLAN
A shareholder may establish a Systematic Withdrawal Plan and
receive regular periodic payments from the account, provided that
the net asset value of the shares held by the shareholder is at
least $5,000. There are no service charges for establishing or
maintaining a Systematic Withdrawal Plan. The minimum amount
which the shareholder may withdraw is $50 per withdrawal
transaction, although this is merely the minimum amount allowed
under the plan and should not be mistaken for a recommended
amount. Retirement accounts subject to mandatory distribution
requirements are not subject to the $50 minimum. The plan may be
established on a monthly, quarterly, semiannual or annual basis.
If the shareholder establishes a plan, any capital gain
distributions and income dividends paid by the Fund will be
reinvested for the shareholder's account in additional shares at
net asset value. Payments will then be made from the liquidation
of shares at net asset value on the day of the transaction (which
is generally the first business day of the month in which the
payment is scheduled) with payment generally received by the
shareholder three to five days after the date of liquidation. By
completing the "Special Payment Instructions for Distributions"
section of the Shareholder Application included with this
Prospectus, a shareholder may direct the selected withdrawals to
another of the Franklin Templeton Funds, to another person, or
directly to a checking account. If the bank at which the account
is maintained is a member of the Automated Clearing House, the
payments may be made automatically by electronic funds transfer.
If this last option is requested, the shareholder should allow at
least 15 days for initial processing. Payments made in the
interim will be sent to the address of record. Liquidation of
shares may reduce or possibly exhaust the shares in the
shareholder's account, to the extent withdrawals exceed shares
earned through dividends. If the withdrawal amount exceeds the
total plan balance, the account will be closed and the remaining
balance will be sent to the shareholder. As with other
redemptions, a liquidation to make a withdrawal payment is a sale
for federal income tax purposes. Because the amount withdrawn
under the plan may be more than the shareholder's actual yield or
income, part of the payment may be a return of the shareholder's
investment.
The maintenance of a Systematic Withdrawal Plan concurrently with
purchases of additional shares of the Fund would be
disadvantageous because of the sales charge on the additional
purchases. Also, redemptions of shares may be subject to a
contingent deferred sales charge if the shares are redeemed
within 18 months of the calendar month of the original purchase
date. The shareholder should ordinarily not make additional
investments of less than $5,000 or three times the annual
withdrawals under the plan during the time such a plan is in
effect.
The contingent deferred sales charge is waived for share
redemptions of up to 1% monthly of an account's net asset value
(12% annually, 6% semi-annually, 3% quarterly). For example, if
the account maintained an annual balance of $10,000, only $1,200
could be withdrawn through a once-yearly Systematic Withdrawal
Plan free of charge; and amounts over that $1,200 would be
assessed a 1% (or applicable) contingent deferred sales charge.
A Systematic Withdrawal Plan may be terminated on written notice
by the shareholder or the Fund, and it will terminate
automatically if all shares are liquidated or withdrawn from the
account, or upon the Fund's receipt of notification of the death
or incapacity of the shareholder. Shareholders may change the
amount (but not below the specified minimum) and schedule of
withdrawal payments, or suspend one such payment by giving
written notice to Investor Services at least seven business days
prior to the end of the month preceding a scheduled payment.
Share certificates may not be issued while a Systematic
Withdrawal Plan is in effect.
MULTIPLE ACCOUNTS FOR FIDUCIARIES
Special procedures have been designed for banks and other
institutions wishing to open multiple accounts in the Fund.
Further information is included in the Fund's SAI.
RIGHTS OF ACCUMULATION
The cost or current value (whichever is higher) of the shares in
the Fund will be included in determining the sales charge
discount to which an investor may be entitled when purchasing
Class I shares of one of the Franklin Templeton Funds which are
sold with a front-end sales charge. This feature does not apply
to purchases of Class II shares, which are subject a 1% sales
charge and a to a 1% contingent deferred sales charge if redeemed
within 18 months of purchase. Included for these aggregation
purposes are (a) the mutual funds in the Franklin Group of Funds
(Registered Trademark) except Franklin Valuemark Funds and
Franklin Government Securities Trust (the "Franklin Funds"), (b)
other investment products underwritten by Distributors or its
affiliates (although certain investments may not have the same
schedule of sales charges and/or may not be subject to reduction)
and (c) the U.S. mutual funds in the Templeton Group of Funds
except Templeton Capital Accumulator Fund, Inc., Templeton
Variable Annuity Fund, and Templeton Variable Products Series
Fund (the "Templeton Funds"). (Franklin Funds and Templeton Funds
are collectively referred to as the "Franklin Templeton Funds.")
Fund shares will also be included toward the completion of a
Letter of Intent with respect to any of the Class I shares
offered by any of the Franklin Templeton Funds which are sold
with a sales charge.
To assist shareholders in obtaining additional information
regarding these programs, a list of telephone numbers is included
in "How to Get Information Regarding an Investment in the Fund."
PURCHASING SHARES OF THE FUND IN CONNECTION WITH
RETIREMENT PLANS INVOLVING TAX-DEFERRED INVESTMENTS
Shares of the Fund may be used for individual or employer-
sponsored retirement plans involving tax-deferred investments.
The Fund may be used as an investment vehicle for an existing
retirement plan, or Franklin Templeton Trust Company ( the "Trust
Company") may provide the plan documents and serve as custodian
or trustee.
The Trust Company, an affiliate of Distributors, can serve as
custodian or trustee for retirement plans. Brochures for the
Trust Company plans contain important information regarding
eligibility, contribution and deferral limits and distribution
requirements. Please note that an application other than the one
contained in this Prospectus must be used to establish a
retirement plan account with the Trust Company. To obtain a
retirement plan brochure or application, call toll free 1-
800/DIAL BEN (1-800/342-5236).
Please see "How to Sell Shares of the Fund" for specific
information regarding redemptions from retirement plan accounts.
Specific forms are required to be completed for distributions
from Franklin Templeton Trust Company retirement plans.
Individuals and plan sponsors should consult with legal, tax or
benefits and pension plan consultants before choosing a
retirement plan. In addition, retirement plan investors should
consider consulting their investment representatives or advisors
concerning investment decisions within their plans.
INSTITUTIONAL ACCOUNTS
There may be additional methods of purchasing, redeeming or
exchanging shares of the Fund available to institutional
accounts. For further information, contact Franklin's
Institutional Services Department at 1-800/321-8563.
EXCHANGE PRIVILEGE
The Franklin Templeton Funds consist of a number of funds with
various investment objectives and policies. The shares of many of
such funds are offered to the public in multiple classes and are
subject to a front-end or contingent deferred sales charges. If a
shareholder's investment objective or outlook for the securities
markets changes, the Fund shares may be exchanged for Class II
shares of Franklin Templeton Funds (as defined under "Rights of
Accumulation") which are eligible for sale in the shareholder's
state of residence and in conformity with such fund's stated
eligibility requirements and investment minimums.
Shareholders are entitled to exchange their shares at net asset
value for shares of the same class of another fund in the
Franklin Templeton Funds. . Exchanges of shares of other funds in
the Franklin Templeton Funds for shares of the Fund are generally
taxable and shareholders will generally recognize gains and
losses on such exchanges. All exchanges are subject to the
minimum investment amount. No exchanges between different classes
of shares will be allowed. For this purpose the Fund's shares are
treated as Class II shares.
A contingent deferred sales charge will not be imposed on
exchanges of Fund shares for Class II shares of other funds or on
exchanges of Class II shares of other funds for Fund shares. If
the exchanged shares were subject to a contingent deferred sales
charge in the original fund, and the acquired shares are
subsequently redeemed within eighteen months of the purchase date
of the original shares, a contingent deferred sales charge will
be imposed.
When an account has some shares subject to the contingent
deferred sales load, and some that are not, the shares will be
transferred proportionately from each type of shares into the new
fund. Shares free from a contingent deferred sales charge are
referred to as "free shares," shares which were originally
subject to a contingent deferred sales charge but to which the
contingent deferred sales charge no longer applies are called
"matured shares," and shares still subject to the contingent
deferred sales charge are referred to as "CDSC liable shares",
and each represents a different type of share for purposes of
exchanging into a new fund. CDSC liable share held for different
periods of time are considered different types of CDSC liable
shares. For instance, if a shareholder has $1,000 in free shares,
$2,000 in matured shares, and $3,000 in CDSC liable shares, and
the shareholder exchanges $3,000 into a new fund, $500 will be
exchanged from free shares, $1000 from matured shares, and $1500
from CDSC liable shares. Similarly, if CDSC liable shares have
been purchased at different periods, a proportionate amount will
be taken from shares held for each period. If, for example, this
shareholder holds $1000 in shares bought 3 months ago, $1000
bought 6 months ago, and $1000 bought 9 months ago, $500 in each
of these shares will be exchanged into the new fund.
To the extent shares are exchanged proportionately, as opposed to
another method, such as first-in first-out, or free-shares
followed by CDSC liable shares, the exchanged shares may, in some
instances, be CDSC liable even though a redemption of such
shares, as discussed elsewhere herein, may no longer be subject
to a CDSC. The proportional method is believed by management to
more closely meet and reflect the expectations of Class II
shareholders in the event shares are redeemed during the
contingency period. For federal income tax purposes, the cost
basis of shares redeemed or exchanged is determined under the
Code without regard to the method of transferring shares chosen
by the Fund.
Transfers between identically registered accounts in the same
Fund are treated as non-monetary and non-taxable events, and are
not subject to a contingent deferred sales charge. The
transferred shares will continue to age from the date of original
purchase. Like exchanges, shares will be moved proportionately
from each type of shares in the original account.
Exchanges may be made in any of the following ways:
EXCHANGES BY MAIL
Send written instructions signed by all account owners. The
transaction will be effective upon receipt of the written
instructions.
EXCHANGES BY TELEPHONE
SHAREHOLDERS, OR THEIR INVESTMENT REPRESENTATIVE OF RECORD, IF
ANY, MAY EXCHANGE SHARES OF THE FUND BY TELEPHONE BY CALLING
INVESTOR SERVICES AT 1-800/632-2301 OR THE AUTOMATED FRANKLIN
TELEFACTS(REGISTERED TRADEMARK) SYSTEM (DAY OR NIGHT) AT 1-
800/247-1753. IF THE SHAREHOLDER DOES NOT WISH THIS PRIVILEGE
EXTENDED TO A PARTICULAR ACCOUNT, THE FUND OR INVESTOR SERVICES
SHOULD BE NOTIFIED.
The Telephone Exchange Privilege allows a shareholder to effect
exchanges from the Class of Fund shares currently held into the
same class of an identically registered account in one of the
other available Franklin Templeton Funds. The Fund and Investor
Services will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Please refer
to "Telephone Transactions - Verification Procedures."
During periods of drastic economic or market changes, it is
possible that the Telephone Exchange Privilege may be difficult
to implement and the TeleFACTS option may not be available. In
this event, shareholders should follow the other exchange
procedures discussed in this section, including the procedures
for processing exchanges through securities dealers.
EXCHANGES THROUGH SECURITIES DEALERS
As is the case with all purchases of the Fund's shares, Investor
Services will accept exchange orders by telephone or by other
means of electronic transmission from securities dealers who
execute a dealer or similar agreement with Distributors. The use
of the term "securities dealer" shall include other financial
institutions which, pursuant to an agreement with Distributors
(directly or through affiliates), handle customer orders and
accounts with the Fund. Such reference, however, is for
convenience only and does not indicate a legal conclusion of
capacity. See also "Exchanges By Telephone" above. A securities
dealer may charge a fee for handling an exchange.
ADDITIONAL INFORMATION REGARDING EXCHANGES
Shares of the Fund acquired other than pursuant to the Exchange
Privilege or the reinvestment of dividends with respect to such
shares, may be exchanged at the offering price of one of the
other Franklin Templeton Funds. Such offering price includes the
applicable sales charge of the fund into which the shares are
being exchanged. Exchanges will be effected at the respective net
asset values or offering prices of the funds involved at the
close of business on the day on which the request is received in
proper form.
There are many differences among the funds in the Franklin
Templeton Fund. Before making an exchange, a shareholder should
obtain and review a current prospectus of the fund into which the
shareholder wishes to transfer.
The Exchange Privilege may be modified or discontinued by the
Fund at any time upon 60 days' written notice to shareholders.
RETIREMENT ACCOUNTS
Franklin Templeton IRA and 403(b) retirement accounts may
accomplish exchanges by contacting the Fund directly. Certain
restrictions may apply, however, to other types of retirement
plans. See "Restricted Accounts" under "Telephone Transactions."
TIMING ACCOUNTS
Accounts which are administered by allocation or market timing
services to purchase or redeem shares based on predetermined
market indicators ("Timing Accounts") will be charged a $5.00
administrative service fee per each such exchange. All other
exchanges are without charge.
RESTRICTIONS ON EXCHANGES
In accordance with the terms of their respective prospectuses,
certain funds do not accept or may place differing limitations
than those below on exchanges by Timing Accounts.
The Fund reserves the right to temporarily or permanently
terminate the exchange privilege or reject any specific purchase
order for any Timing Account or any person whose transactions
seem to follow a timing pattern who: (i) makes an exchange
request out of the Fund within two weeks of an earlier exchange
request out of the Fund, or (ii) makes more than two exchanges
out of the Fund per calendar quarter, or (iii) exchanges shares
equal in value to at least $5 million, or more than 1% of the
Fund's net assets. Accounts under common ownership or control,
including accounts administered so as to redeem or purchase
shares based upon certain predetermined market indicators, will
be aggregated for purposes of the exchange limits.
The Fund reserves the right to refuse the purchase side of
exchange requests by any Timing Account, person, or group if, in
Advisers' judgment, the Fund would be unable to invest
effectively in accordance with its investment objectives and
policies, or would otherwise potentially be adversely affected. A
shareholder's purchase exchanges may be restricted or refused if
the Fund receives or anticipates simultaneous orders affecting
significant portions of the Fund's assets. In particular, a
pattern of exchanges that coincide with a "market timing"
strategy may be disruptive to the Fund and therefore may be
refused.
The Fund and Distributors also, as indicated in "How to Buy
Shares of the Fund," reserve the right to refuse any order for
the purchase of shares.
TELEPHONE TRANSACTIONS
Shareholders of the Fund and their investment representative of
record, if any, may be able to execute various transactions by
calling Investor Services at 1-800/632-2301.
All shareholders will be able to: (i) effect a change in address,
(ii) change a dividend option (see "Restricted Accounts" below),
(iii) transfer Fund shares in one account to another identically
registered account in the Fund, and (iv) exchange Fund shares as
described in this Prospectus by telephone. In addition,
shareholders who complete and file an Agreement as described
under "How to Sell Shares of the Fund - By Telephone" will be
able to redeem shares of the Fund.
VERIFICATION PROCEDURES
The Fund and Investor Services will employ reasonable procedures
to confirm that instructions communicated by telephone are
genuine. These will include: recording all telephone calls
requesting account activity by telephone, requiring that the
caller provide certain personal and/or account information
requested by the telephone service agent at the time of the call
for the purpose of establishing the caller's identification, and
sending a confirmation statement on redemptions to the address of
record each time account activity is initiated by telephone. So
long as the Fund and Investor Services follow instructions
communicated by telephone which were reasonably believed to be
genuine at the time of their receipt, neither they nor their
affiliates will be liable for any loss to the shareholder caused
by an unauthorized transaction. The Fund and Investor Services
may be liable for any losses due to unauthorized or fraudulent
instructions only if such reasonable procedures are not followed.
Shareholders are, of course, under no obligation to apply for or
accept telephone transaction privileges. In any instance where
the Fund or Investor Services is not reasonably satisfied that
instructions received by telephone are genuine, the requested
transaction will not be executed, and neither the Fund nor
Investor Services will be liable for any losses which may occur
because of a delay in implementing a transaction.
RESTRICTED ACCOUNTS
Telephone redemptions and dividend option changes may not be
accepted on Trust Company retirement accounts. To assure
compliance with all applicable regulations, special forms are
required for any distribution, redemption, or dividend payment.
While the telephone exchange privilege is extended to Franklin
Templeton IRA and 403(b) retirement accounts, certain
restrictions may apply to other types of retirement plans.
Changes to dividend options must also be made in writing.
To obtain further information regarding distribution or transfer
procedures, including any required forms, retirement account
shareholders may call to speak to a Retirement Plan Specialist at
1-800/527-2020 for Franklin accounts or 1-800/354-9191 (press "2"
when prompted to do so) for Templeton accounts.
GENERAL
During periods of drastic economic or market changes, it is
possible that the telephone transaction privileges will be
difficult to execute because of heavy telephone volume. In such
situations, shareholders may wish to contact their registered
investment representative for assistance, or to send written
instructions to the Fund as detailed elsewhere in this
Prospectus.
Neither the Fund nor Investor Services will be liable for any
losses resulting from the inability of a shareholder to execute a
telephone transaction.
The telephone transaction privilege may be modified or
discontinued by the Fund at any time upon 60 days' written notice
to shareholders.
VALUATION OF FUND SHARES
The net asset value of the shares of the Fund is determined by
the Fund at 3:00 p.m. Pacific time each day that the Exchange is
open for business. The net asset value per share is calculated by
adding the value of all of the Fund's portfolio holdings (i.e.,
shares of the Portfolio) and other assets, deducting the Fund's
liabilities, and dividing the result by the number of Fund shares
outstanding.
The valuation of the portfolio securities held by the Portfolio
is based upon their amortized cost value, which does not take
into account unrealized capital gain or loss. This involves
valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the
market value of the instrument. The Portfolio's use of amortized
cost, which facilitates the maintenance of the Portfolio's per
share net asset value of $1.00, is permitted by Rule 2a-7.
Further information is included under "Determination of Net Asset
Value" in the SAI.
HOW TO GET INFORMATION REGARDING AN INVESTMENT IN THE FUND
Any questions or communications regarding a shareholder's account
should be directed to Investor Services at the address shown on
the back cover of this Prospectus.
From a touch tone phone, Franklin and Templeton shareholders may
access an automated system (day or night) which offers the
following features.
By calling the Franklin TeleFACTS (Registered Trademark) system,
Fund and Templeton Class I or II shares and Franklin Class II
shares shareholders may obtain current price, yield or other
performance information regarding the Franklin Class I and Class
II shareholders; obtain account information and request duplicate
confirmation or year-end statements, money fund checks, if
applicable, and deposit slips.
Share prices and account information specific to Templeton Class
I or II shares and Franklin Class II shares may also be accessed
on TeleFACTS by Franklin Class I and Class II shareholders.
The TeleFACTS system is accessible by calling 1-800/247-1753. The
Star Service is accessible by calling 1-800/654-0123. The
Franklin code for the Fund, which will be needed to access system
information is 511. The system's automated operator will prompt
the caller with easy to follow step-by-step instructions from the
main menu. Other features may be added in the future.
To assist shareholders and securities dealers wishing to speak
directly with a representative, the following is a list of the
various Franklin departments, telephone numbers and hours of
operation to call. The same numbers may be used when calling from
a rotary phone:
DEPARTMENT NAME TELEPHONE NO. HOURS OF OPERATION (PACIFIC TIME)
(MONDAY THROUGH FRIDAY)
Shareholder Services 1-800/632-2301 6:00 a.m. to 5:00 p.m.
Dealer Services 1-800/524-4040 6:00 a.m. to 5:00 p.m.
Fund Information 1-800/DIAL BEN 6:00 a.m. to 8:00 p.m.
8:30 a.m. to 5:00 p.m. (Saturday)
Retirement Plans 1-800/527-2020 6:00 a.m. to 5:00 p.m.
TDD (hearing 1-800/851-0637 6:00 a.m. to 5:00 p.m.
impaired)
In order to ensure that the highest quality of service is being
provided, telephone calls placed to or by representatives in
Franklin's service departments may be accessed, recorded and
monitored. These calls can be determined by the presence of a
regular beeping tone.
PERFORMANCE
Advertisements, sales literature and communications to
shareholders may contain various measures of the Fund's
performance, including quotations of its current and effective
yield.
Current yield as prescribed by the SEC is an annualized
percentage rate which reflects the change in value of a
hypothetical account based on the income received from the Fund
during a seven-day period. It is computed by determining the net
change, excluding capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the
beginning of the period. A hypothetical charge reflecting
deductions from shareholder accounts for administrative fees or
shareholder services fees, for example, is subtracted from the
value of the account at the end of the period, and the difference
is divided by the value of the account at the beginning of the
base period to obtain the base period return. The result is then
annualized. Effective yield is computed in the same manner except
that the annualization of the return for the seven-day period
reflects the results of compounding (that is, the effect of
reinvesting dividends paid on both the original share and those
acquired from the reinvestment of such dividends).
In each case, performance figures are based upon past performance
and will reflect all recurring charges against Fund income. Such
quotations will reflect the value of any additional shares
purchased with dividends from the original share and any
dividends declared on both the original share and such additional
shares. The investment results of the Fund, like all other
investment companies, will fluctuate over time; thus, performance
figures should not be considered to represent what an investment
may earn in the future or what the Fund's performance may be in
any future period.
GENERAL INFORMATION
REPORTS TO SHAREHOLDERS
The Fund's fiscal year ends June 30. Annual Reports containing
audited financial statements of the Fund, including the auditors'
report, and Semi-Annual Reports containing unaudited financial
statements are automatically sent to shareholders. Additional
copies may be obtained, without charge, upon request to the Fund
at the telephone number or address set forth on the cover page of
this Prospectus.
Additional information on Fund performance is included in the
Fund's Annual Report to Shareholders and the SAI.
ORGANIZATION
The Fund is curently the only series of the Trust, which was
organized as a Delaware business trust on January 30, 1995. The
Trust is authorized to issue an unlimited number of shares of
beneficial interest, with a par value of $.01 per share in
various series, or classes thereof. All shares have one vote,
and, when issued, are fully paid, non-assessable, and redeemable.
Currently, the Trust issues shares in one series with one class.
Additional series or classes may be added in the future by the
Board of Trustees. All shares of the fund have equal voting,
dividend and liquidation rights. The shares have non-cumulative
voting rights, which means that holders of more than 50% of the
shares voting for the election of trustees can elect 100% of the
trustees if they choose to do so. The Trust does not intend to
hold annual meetings; it may, however, hold special shareholder
meetings for such purposes as changing fundamental investment
restrictions, approving a new management or administration
agreement or any other matters which are required to be acted on
by shareholders under the 1940 Act. A meeting may also be called
by a majority of the Board of Trustees or by shareholders holding
at least ten percent of the shares entitled to vote at the
meeting. Shareholders may receive assistance in communicating
with other shareholders in connection with the election or
removal of trustees such as that provided in Section 16(c) of the
1940 Act. Whenever the Fund is requested to vote on a matter
relating to the Portfolio, the Fund will hold a meeting of Fund
shareholders and will cast its vote in the same proportion as the
Fund's shareholders have voted.
REDEMPTIONS BY THE FUND
The Fund reserves the right to redeem, at net asset value, shares
of any shareholder whose account has a value of less than one-
half of the required minimum investment, but only where the value
of such account has been reduced by the shareholder's prior
voluntary redemption of shares and has been inactive (except for
the reinvestment of distributions) for a period of at least six
months, provided advance notice is given to the shareholder. More
information is included in the SAI.
OTHER INFORMATION
The Fund may impose a $10 charge for each returned item, against
any shareholder account which, in connection with the purchase of
Fund shares, submits a check or a draft which is returned unpaid
to the Fund.
Distribution or redemption checks sent to shareholders do not
earn interest or any other income during the time such checks
remain uncashed, and neither the Fund nor its affiliates will be
liable for any loss to the shareholder caused by the
shareholder's failure to cash such check(s).
Shares of the Fund may or may not constitute a legal investment
for investors whose investment authority is restricted by
applicable law or regulation. SUCH INVESTORS SHOULD CONSULT THEIR
OWN LEGAL ADVISORS TO DETERMINE WHETHER AND TO WHAT EXTENT THE
SHARES OF THE FUND CONSTITUTE LEGAL INVESTMENTS FOR THEM.
Municipal investors considering investment of proceeds of bond
offerings into the Fund should consult with expert counsel to
determine the effect, if any, of various payments made by the
Fund or its investment manager on arbitrage rebate calculations.
"Cash" payments from the Fund may be made by check, draft or
wire. The Fund has no facility to receive, or pay out, cash in
the form of currency.
ACCOUNT REGISTRATIONS
An account registration should reflect the investor's intentions
as to ownership.
Accounts should not be registered in the name of a minor, either
as sole or co-owner of the account. Transfer or redemption for
such an account may require court action to obtain release of the
funds until the minor reaches the legal age of majority. The
account should be registered in the name of one "Adult" as
custodian for the benefit of the "Minor" under the Uniform
Transfer or Gifts to Minors Act.
A trust designation such as "trustee" or "in trust for" should
only be used if the account is being established pursuant to a
legal, valid trust document. Use of such a designation in the
absence of a legal trust document may cause difficulties and
require court action for transfer or redemption of the funds.
Shares registered as joint tenants or "Jt Ten" shall mean "as
joint tenants with rights of survivorship" and not "as tenants in
common."
Except as indicated, a shareholder may transfer an account in the
Fund carried in "street" or "nominee" name by the shareholder's
securities dealer to a comparably registered Fund account
maintained by another securities dealer. Both the delivering and
receiving securities dealers must have executed dealer or similar
agreements on file with Distributors. Unless such agreement has
been executed and is on file with Distributors, the Fund will not
process the transfer and will so inform the shareholder's
delivering securities dealer. To effect the transfer, a
shareholder should instruct the securities dealer to transfer the
account to a receiving securities dealer and sign any documents
required by the securities dealer(s) to evidence consent to the
transfer. Under current procedures, the account transfer may be
processed by the delivering securities dealer and the Fund after
the Fund receives authorization in proper form from the
shareholder's delivering securities dealer. In the future it may
be possible to effect such transfers electronically through the
services of the NSCC.
The Fund may conclusively accept instructions from an owner or
the owner's nominee listed in publicly available nominee lists,
regardless of whether the account was initially registered in the
name of or by the owner, the nominee, or both. If a securities
dealer or other representative is of record on an investor's
account, the investor will be deemed to have authorized the use
of electronic instructions on the account, including, without
limitation, those initiated through the services of the NSCC, to
have adopted as instruction and signature any such electronic
instructions received by the Fund and the Shareholder Services
Agent and to have authorized them to execute the instructions
without further inquiry. At the present time, such services which
are available, include the NSCC's "Networking," "Fund/SERV," and
"ACATS" systems.
Any questions regarding an intended registration should be
answered by the securities dealer handling the investment, or by
calling Franklin's Fund Information Department.
IMPORTANT NOTICE REGARDING
TAXPAYER IRS CERTIFICATIONS
Pursuant to the Code and U.S. Treasury regulations, the Fund may
be required to report to the IRS any taxable dividend, capital
gain distribution, or other reportable payment and withhold 31%
of any such payments made to individuals and other non-exempt
shareholders who have not provided a correct taxpayer
identification number ("TIN") and made certain required
certifications that appear in the Shareholder Application. A
shareholder may also be subject to backup withholding if the IRS
or a securities dealer notifies the Fund that the TIN furnished
by the shareholder is incorrect or that the shareholder is
subject to backup withholding for previous under-reporting of
interest or dividend income.
The Fund reserves the right to (1) refuse to open an account for
any person failing to provide a TIN along with the required
certifications and (2) close an account by redeeming its shares
in full at the then-current net asset value upon receipt of
notice from the IRS that the TIN certified as correct by the
shareholder is in fact incorrect or upon the failure of a
shareholder who has completed an "awaiting TIN" certification to
provide the Fund with a certified TIN within 60 days after
opening the account.
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton
Money Fund Trust
STATEMENT OF
ADDITIONAL INFORMATION
May 1, 1995
777 Mariners Island Blvd., P.O. Box 7777
San Mateo, CA 94403-7777 1-800/DIAL BEN
CONTENTS PAGE
The Fund (See also Prospectus
"About the Fund")
Additional Information Regarding
the Fund's Investment Objective
and Policies (See also the Prospectus
"Investment Objective and Policies
of the Fund")
Officers and Trustees
Administration and Other Services
(See also the Prospectus "Administration
of the Fund")
Policies Regarding Brokers Used on Portfolio
Transactions
Determination of Net Asset Value
(See also the Prospectus "Valuation
of Fund Shares")
Additional Information Regarding
Purchases and Redemptions of
Fund Shares
Additional Information Regarding
Distributions and Taxes
The Fund's Underwriter
General Information
Appendices
Financial Statements
A Prospectus for Franklin Templeton Money Fund II (the "Fund"),
an open-end, diversified series of the Franklin Templeton Money
Fund Trust (the "Trust"), a management investment company, dated
1995, as may be amended from time to time, which provides the
basic information a prospective investor should know before
investing in the Fund may be obtained without charge from the
Fund or the Fund's principal underwriter, Franklin/Templeton
Distributors, Inc. ("Distributors"), at the address shown above
or by calling 1-800/DIAL BEN.
The Fund offers only one class of shares. The Fund is intended to
be made available primarily as a short-term or cash management
investment option for investors in Class II shares of other funds
in the Franklin Templeton Group. The distribution structure of
the Fund and such Funds offering Class II shares is similar and
complementary in several respects, including provions regarding
contingent deferred sales charges and Rule 12b-1 fees.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT
CONTAINS INFORMATION IN ADDITION TO AND IN MORE DETAIL THAN THAT
SET FORTH IN THE PROSPECTUS. THIS STATEMENT IS INTENDED TO
PROVIDE AN INVESTOR WITH ADDITIONAL INFORMATION REGARDING THE
ACTIVITIES AND OPERATIONS OF THE FUND, AND SHOULD BE READ IN
CONJUNCTION WITH THE FUND'S CURRENT PROSPECTUS.
THE FUND
Franklin Templeton Money Fund II is the only series of the Trust,
an open-end, diversified management investment company. The Trust
is a Delaware business trust organized on January 30, 1995.
Shares of the Fund may not be purchased directly. Shares may be
acquired only in exchange for Class II shares of other Franklin
Templeton Funds, and as result of the reinvestment of income
dividends and capital gains distributions in additional shares of
the Fund. The investment objectives of the Fund are capital
preservation, high current income, and liquidity. The Fund
invests all of its assets in The Money Market Portfolio (the
"Portfolio"). The Portfolio is a series of The Money Market
Portfolios, a separate open-end management investment company,
and is not part of the Fund. The Portfolio's assets will
generally be invested in money market instruments of various
types.
ADDITIONAL INFORMATION REGARDING THE
FUND'S INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVES AND POLICIES
As stated in the Prospectus, the investment objective of the Fund
is to obtain for its investors the highest level of current
income consistent with liquidity and the preservation of capital.
The Fund seeks to achieve this objective by investing all of its
assets in the Portfolio. The Portfolio in turn invests primarily
in various types of money market instruments, such as U.S.
government and federal agency and instrumentality obligations,
certificates of deposit, bankers' acceptances, time deposits of
major financial institutions, high grade commercial paper, high
grade short-term corporate obligations, and repurchase agreements
(secured by U.S. government securities). The achievement of the
Portfolio's objective will depend on market conditions generally
and on its investment manager's analytical and portfolio
management skills. It should also be noted that because the
Portfolio is limiting its investments to high quality securities,
there will be a generally lower yield than if the Portfolio
purchased securities with a lower rating and correspondingly
greater risk. The value of the securities held will fluctuate
inversely with interest rates, and therefore there is no
assurance that the Portfolio's or the Fund's objective will be
achieved. The investment objective and policies of the Fund as
set forth herein are fundamental, and may not be changed without
the approval of a majority of the Fund's outstanding shares.
As stated in the Prospectus, the Portfolio may make loans of its
portfolio securities in accordance with guidelines adopted by the
Portfolio's Board of Trustees. The lending of securities is a
common practice in the securities industry. The Portfolio will
engage in security loan arrangements with the primary objective
of increasing the Portfolio's income either through investing the
cash collateral in short-term, interest bearing obligations or by
receiving loan premiums from the borrower. The Portfolio will
continue to be entitled to all dividends or interest on any
loaned securities. As with any extension of credit, there are
risks of delay in recovery and loss of rights in the collateral
should the borrower of the security fail financially. The
Portfolio will not lend its portfolio securities if such loans
are not permitted by the laws or regulations of any state in
which its shares are qualified for sale. Loans will be subject to
termination by the Portfolio in the normal settlement time,
currently five business days after notice, or by the borrower on
one day's notice. Borrowed securities must be returned when the
loan is terminated. Any gain or loss in the market price of the
borrowed securities which occurs during the term of the loan
inures to the Portfolio and its shareholders. The Portfolio may
pay reasonable finders', borrowers', administrative and custodial
fees in connection with a loan of its securities.
Because the Portfolio will not purchase any instrument with a
remaining maturity of greater than 397 calendar days, it is not
expected that there will be any reportable annual portfolio
turnover rate.
In addition, because of short-term variations in market or
business conditions, management's revised evaluation of a
portfolio security, or the need to obtain cash to meet
redemptions, the Portfolio may sell portfolio securities prior to
maturity. The Portfolio may also invest in deposits fully insured
by the U.S. government or its agencies or instrumentalities. Such
deposits may include deposits in banking and savings institutions
up to the limit (currently $100,000 per depository) of the
insurance on principal provided by the Federal Deposit Insurance
Corporation. Such deposits are frequently combined in larger
units by an intermediate bank or other institution.
The Fund has adopted the following restrictions as additional
fundamental policies of the Fund, which means that they may not
be changed without the approval of a majority of the outstanding
voting securities of the Fund. Under the Investment Company Act
of 1940 (the "1940 Act"), a "vote of a majority of the
outstanding voting securities" of the Fund means the affirmative
vote of the lesser of (1) more than 50% of the outstanding shares
of the Fund, or (2) 67% or more of the shares of the Fund present
at a shareholders' meeting if more than 50% of the outstanding
shares of the Fund are represented at the meeting in person or by
proxy. These restrictions provide that the Fund MAY NOT:
1. Borrow money or mortgage or pledge any of its assets, except
that borrowings (and a pledge of assets therefor) for
extraordinary or emergency purposes may be made from banks in any
amount up to 5% of the total asset value.
2. Make loans, except (a) through the purchase of debt
securities in accordance with the investment objectives and
policies of the Portfolio, (b) to the extent the entry into a
repurchase agreement is deemed to be a loan, or (c) by the loan
of its portfolio securities in accordance with the policies
described above.
3. Acquire, lease or hold real estate, including real estate
limited partnerships, provided that this limitation shall not
prohibit the purchase of municipal and other debt securities
secured by real estate or interests therein.
4. Buy any securities "on margin" or sell any securities
"short," except that it may use such short-term credits as are
necessary for the clearance of transactions.
5. Invest in commodities and commodity contracts, puts, calls,
straddles, spreads, or any combination thereof, except that it
may purchase, hold and dispose of "obligations with puts
attached," or interests in oil, gas, or other mineral leases or
exploration or development programs.
6. Purchase securities in private placements or in other
transactions, for which there are legal or contractual
restrictions on resale, except that, to the extent this
restriction is applicable, the Fund may purchase, in private
placements, shares of another registered investment company
having the same investment objectives and policies as the Fund.
7. Act as underwriter of securities issued by other persons
except insofar as the Fund may technically be deemed an
underwriter under the federal securities laws in connection with
the disposition of portfolio securities, except that all or
substantially all of the assets of the Fund may be invested in
another registered investment company having the same investment
objective and policies as the Fund.
8. Purchase the securities of other investment companies, except
in connection with a merger, consolidation, acquisition, or
reorganization; provided that all or substantially all of the
assets of the Fund may be invested in another registered
investment company having the same investment objectives and
policies as the Fund.
9. Invest in any issuer for purposes of exercising control or
management, except that, to the extent this restriction is
applicable, all or substantially all of the assets of the Fund
may be invested in another registered investment company having
the same investment objectives and policies as the Fund.
10. Purchase securities from or sell to the Fund's officers and
trustees, or any firm of which any officer or trustee is a
member, as principal, or retain securities of any issuer if, to
the knowledge of the Fund, one or more of the Fund's officers,
trustees, or investment adviser own beneficially more than 1/2 of
1% of the securities of such issuer and all such officers and
trustees together own beneficially more than 5% of such
securities.
11. Invest more than 25% of its assets in securities of any
industry, although for purposes of this limitation, U.S.
government obligations are not considered to be part of any
industry. This prohibition does not apply where the Fund's
policies, as described in its current prospectus, state
otherwise, and further does not apply to the extent that the Fund
invests all of its assets in another registered investment
company having the same investment objective and policies.
If a percentage restriction contained herein is adhered to at the
time of investment, a later increase or decrease in percentage
resulting from a change in values of portfolio securities or
amount of net assets will not be considered a violation of any of
the foregoing restrictions.
As noted in the Prospectus, the Portfolio's trustees have elected
to value the Portfolio's assets in accordance with Rule 2a-7
under the 1940 Act. This rule also imposes various restrictions
on the Portfolio which are, in some cases, more restrictive than
the Portfolio's other stated fundamental policies and investment
restrictions. The rule provides that any fund which holds itself
out as a money market fund must follow certain portfolio
provisions of the rule regarding the maturity and quality of each
portfolio investment, and the diversity of such investments. The
restrictions imposed by Rule 2a-7 are fundamental policies of the
Portfolio and the Portfolio must comply with these provisions
unless its shareholders vote to change its policy of being a
money market fund. Notwithstanding the policy regarding options
set forth in Investment Restriction No. 5, the Fund will engage
in such transactions, if at all, only as permitted under
applicable state and federal law.
OFFICERS AND TRUSTEES
The Board of Trustees has the responsibility for the overall
management of the Fund, including general supervision and review
of its investment activities. The trustees, in turn, elect the
officers of the Fund who are responsible for administering the
day-to-day operations of the Fund. The affiliations of the
officers and trustees and their principal occupations for the
past five years are listed below. Trustees who are deemed to be
"interested persons" of the Fund, as defined in the 1940 Act, are
indicated by an asterisk (*).
Frank H. Abbott, III (74)
1045 Sansome St.
San Francisco, CA 94111
Trustee
President and Director, Abbott Corporation (an investment
company); and director, trustee or managing general partner, as
the case may be, of 30 of the investment companies in the
Franklin Group of Funds.
Harris J. Ashton (62)
General Host Corporation
Metro Center, 1 Station Place
Stamford, CT 06904-2045
Trustee
President, Chief Executive Officer and Chairman of the Board,
General Host Corporation (nursery and craft centers); Director,
RBC Holdings, Inc. (a bank holding company) and Bar-S Foods; and
director, trustee or managing general partner, as the case may
be, of 54 of the investment companies in the Franklin Templeton
Group of Funds.
S. Joseph Fortunato (52)
Park Avenue at Morris County
P. O. Box 1945
Morristown, NJ 07962-1945
Trustee
Member of the law firm of Pitney, Hardin, Kipp & Szuch; Director
of General Host Corporation; director, trustee or managing
general partner, as the case may be, of 56 of the investment
companies in the Franklin Templeton Group of Funds.
David W. Garbellano (80)
111 New Montgomery St., #402
San Francisco, CA 94105
Trustee
Private Investor; Assistant Secretary/Treasurer and Director,
Berkeley Science Corporation (a venture capital company); and
director, trustee or managing general partner, as the case may
be, of 29 of the investment companies in the Franklin Group of
Funds (Registered Trademark).
*Charles B. Johnson (62)
777 Mariners Island Blvd.
San Mateo, CA 94404
Chairman of the Board and Trustee
President and Director, Franklin Resources, Inc.; Chairman of the
Board and Director, Franklin Advisers, Inc. and Franklin
Templeton Distributors, Inc.; Director, Franklin/Templeton
Investor Services, Inc. and General Host Corporation; and officer
and/or director, trustee or managing general partner, as the case
may be, of most other subsidiaries of Franklin Resources, Inc.
and of 55 of the investment companies in the Franklin Templeton
Group of Funds.
*Rupert H. Johnson, Jr. (54)
777 Mariners Island Blvd.
San Mateo, CA 94404
President and Trustee
Executive Vice President and Director, Franklin Resources, Inc.
and Franklin Templeton Distributors, Inc.; President and
Director, Franklin Advisers, Inc.; Director, Franklin/Templeton
Investor Services, Inc.; and officer and/or director, trustee or
managing general partner, as the case may be, of most other
subsidiaries of Franklin Resources, Inc. and of 42 of the
investment companies in the Franklin Templeton Group of Funds.
Frank W. T. LaHaye (66)
20833 Stevens Creek Blvd.
Suite 102
Cupertino, CA 95014
Trustee
General Partner, Peregrine Associates and Miller & LaHaye, which
are General Partners of Peregrine Ventures and Peregrine Ventures
II (venture capital firms); Chairman of the Board and Director,
Quarterdeck Office Systems, Inc.; Director, FischerImaging
Corporation; and director or trustee, as the case may be, of 25
of the investment companies in the Franklin Group of Funds.
Gordon S. Macklin (66)
8212 Burning Tree Road
Bethesda, MD 20817
Trustee
Chairman, White River Corporation (information services);
Director, Fund American Enterprises Holdings, Inc., Martin
Marietta Corporation, MCI Communications Corporation, MedImmune,
Inc. (biotechnology), Infovest Corporation (information
services), and Fusion Systems Corporation (industrial
technology); and director, trustee or managing general partner,
as the case may be, of 51 of the investment companies in the
Franklin Templeton Group of Funds; formerly, Chairman, Hambrecht
and Quist Group, Director, H & Q Healthcare Investors, and
President, National Association of Securities Dealers, Inc.
Harmon E. Burns (50)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Executive Vice President, Secretary and Director, Franklin
Resources, Inc.; Executive Vice President and Director, Franklin
Templeton Distributors, Inc.; Executive Vice President, Franklin
Advisers, Inc.; Director, Franklin/Templeton Investor Services,
Inc.; officer and/or director, as the case may be, of other
subsidiaries of Franklin Resources, Inc.; and officer and/or
director or trustee of 41 of the investment companies in the
Franklin Templeton Group of Funds.
Kenneth V. Domingues (62)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President - Financial Reporting and Accounting Standards
Senior Vice President, Franklin Resources, Inc., Franklin
Advisers, Inc., and Franklin Templeton Distributors, Inc.;
officer and/or director, as the case may be, of other
subsidiaries of Franklin Resources, Inc.; and officer and/or
managing general partner, as the case may be, of 36 of the
investment companies in the Franklin Group of Funds.
Martin L. Flanagan (34)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Chief Financial Officer
Senior Vice President, Chief Financial Officer and Treasurer,
Franklin Resources, Inc.; Executive Vice President, Templeton
Worldwide, Inc.; Senior Vice President and Treasurer, Franklin
Advisers, Inc. and Franklin Templeton Distributors, Inc.; Senior
Vice President, Franklin/Templeton Investor Services, Inc.;
officer of most other subsidiaries of Franklin Resources, Inc.;
and officer of 60 of the investment companies in the Franklin
Templeton Group of Funds.
Deborah R. Gatzek (46)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President and Secretary
Senior Vice President - Legal, Franklin Resources, Inc. and
Franklin Templeton Distributors, Inc.; Vice President, Franklin
Advisers, Inc. and officer of 36 of the investment companies in
the Franklin Group of Funds.
Diomedes Loo-Tam (55)
777 Mariners Island Blvd.
San Mateo, CA 94404
Treasurer and Principal Accounting Officer
Employee of Franklin Advisers, Inc.; and officer of 36 of the
investment companies in the Franklin Group of Funds.
Edward V. McVey (57)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President/National Sales Manager, Franklin Templeton
Distributors, Inc.; and officer of 31 of the investment companies
in the Franklin Group of Funds.
Thomas J. Runkel (36)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Employee of Franklin Advisers, Inc. and officer of three of the
funds in the Franklin Group of Funds.
Richard C. Stoker (63)
11615 Spring Ridge Rd.
Potomac, Maryland 20854
Vice President
Senior Vice President, Franklin Templeton Distributors, Inc.;
Vice President, Franklin Management, Inc.; and officer of four of
the funds in the Franklin Group of Funds.
R. Martin Wiskemann (67)
777 Mariners Island Blvd.
San Mateo, CA 94404
Vice President
Senior Vice President, Portfolio Manager and Director, Franklin
Advisers, Inc.; Senior Vice President, Franklin Management, Inc.;
Vice President, Treasurer and Director, ILA Financial Services,
Inc. and Arizona Life Insurance Company of America; and officer
and/or director, as the case may be, of 19 of the investment
companies in the Franklin Group of Funds.
The officers and trustees of the Fund are also officers and
trustees of The Money Market Portfolios, except as follows:
Charles E. Johnson, President and Trustee of The Money Market
Portfolios is not an officer or trustee of the Fund; Rupert H.
Johnson, Jr. is President and Trustee of the Fund and Vice
President and Trustee of The Money Market Portfolios; and Richard
C. Stoker and Thomas J. Runkel, Vice Presidents of the Fund are
not officers or trustees of The Money Market Portfolios.
Charles E. Johnson (39)
777 Mariners Island Blvd.
San Mateo, CA 94404
President and Trustee of The Money Market Portfolios
President and Chief Executive Officer of Templeton Worldwide,
Inc.; Senior Vice President and Director, Franklin Resources,
Inc.; Senior Vice President, Franklin Templeton Distributors,
Inc.; President and Director, Franklin Institutional Services
Corporation; officer and/or director, as the case may be, of some
of the subsidiaries of Franklin Resources, Inc. and officer
and/or director or trustee, as the case may be, of 24 of the
investment companies in the Franklin Templeton Group of Funds.
Trustees not affiliated with the Fund's administrator are not now
but may, in the future, be paid fees of $500 per month plus $500
per meeting attended and be reimbursed for expenses incurred in
connection with attending such meetings. As indicated above,
certain of the trustees and officers hold positions with other
companies in the Franklin Templeton Group. The following table
shows, among other things, the total fees paid to the Fund's non-
interested trustees by other Franklin Templeton Funds for which
they serve as director, trustee or managing general partner.
Number of Total Compensation
Franklin From Franklin
Templeton Templeton Funds*
Funds on which
Name Each Served
Frank H. Abbott, 30 $176,870
III
Harris J. Ashton 54 $319,925
S. Joseph 56 $336,065
Fortunato
David W. 29 $153,300
Garbellano
Frank W.T. LaHaye 25 $150,817
Gordon S. Macklin 51 $303,685
* For the calendar year ended December 31, 1994. The Fund
commenced operations on May 1, 1995. Accordingly, the trustees
received no compensations from the Fund for the indicated period.
Non-affiliated trustees are also reimbursed for expenses incurred
in connection with attending Board meetings, paid pro rata by
each Franklin Templeton Fund for which they serve. No officer or
trustee received any other compensation directly from the Fund.
Certain officers or trustees who are shareholders of Franklin
Resources, Inc. may be deemed to receive indirect remuneration by
virtue of their participation, if any, in the fees paid to its
subsidiaries. Charles B. Johnson and Rupert H. Johnson, Jr. are
brothers and the father and uncle, respectively, of Charles E.
Johnson.
ADMINISTRATION AND OTHER SERVICES
The administrator of the Fund is Franklin Advisers, Inc.
("Advisers"). Advisers is a wholly-owned subsidiary of Franklin
Resources, Inc. ("Resources"), a publicly owned holding company
whose shares are listed on the New York Stock Exchange
("Exchange"). Resources owns several other subsidiaries which are
involved in investment management and shareholder services.
Advisers and other subsidiary companies of Resources currently
manage over $114 billion in assets for more than 3.7 million
shareholders. The preceding table indicates those officers and
trustees who are also affiliated persons of Distributors and
Advisers.
The Board of Trustees, with all disinterested trustees as well as
the interested trustees voting in favor, has adopted written
procedures designed to deal with potential conflicts of interest
which may arise from the fact of having substantially the same
persons serving on the Fund's Board of Trustees and The Money
Market Portfolios' Board of Trustees. The Board of Trustees has
determined that there are no conflicts of interest presented by
this arrangement at the present time. See Appendix A for a
summary of these procedures.
The Fund has entered into an administration agreement with
Advisers, effective May 1, 1995, which provides for various
administrative, statistical, and other services for the Fund.
Pursuant to the administration agreement, the Fund is obligated
to pay Advisers (as administrator) a monthly fee equal to an
annual rate of 91/200 of 1% for the first $100 million of it's
average daily net assets; 33/100 of 1% of its net assets over
$100 million up to and including $250 million; and 7/25 of 1% of
its net assets in excess of $250 million.
Pursuant to a separate management agreement with The Money Market
Portfolios, Advisers provides investment research and portfolio
management services, including the selection of securities for
the Portfolio to purchase, hold or sell, and the selection of
brokers or dealers through whom the Portfolio's security
transactions are executed. Advisers' activities are subject to
the review and supervision of the Board of Trustees of The Money
Market Portfolios to whom Advisers renders periodic reports of
the investment activities of the Portfolio. Under the terms of
the management agreement, Advisers furnishes the Portfolio with
office space and office furnishings, facilities and equipment
required for managing the business affairs of the Portfolio;
maintains all internal bookkeeping, clerical, secretarial and
administrative personnel and services; and provides certain
telephone and other mechanical services. Advisers is covered by
fidelity insurance on its officers, directors and employees for
the protection of the Portfolio and the Fund. The Portfolio bears
all expenses related to its operation. The Portfolio, in which
the Fund invests all of its assets, is obligated to pay Advisers
a monthly fee equal to an annual rate of 15/100 of 1% of the
Portfolio's average net assets.
The management agreement specifies that the management fee will
be reduced to the extent necessary to comply with the most
stringent limits prescribed by any state in which the Portfolio's
shares are offered for sale. The most stringent current state
restriction limits a fund's allowable aggregate operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses such as litigation costs) in any fiscal
year to 2.5% of the first $30 million of average net assets of
the fund, 2% of the next $70 million of average net assets of the
fund and 1.5% of average net assets of each fund in excess of
$100 million. The Fund bears all expenses related to its
operation, as discussed in the Prospectus. Expense reductions
have not been necessary based on state requirements. There is no
management agreement for the Fund.
As noted in the Prospectus, Advisers has voluntarily agreed in
advance to waive a portion of its management fees from the
Portfolio and/or its administration fee from the Fund to ensure
that the total aggregate operating expenses of the Fund and the
Portfolio are not higher than what the Fund's total operating
expenses would have been under the terms of the management
agreement with the Fund.
The management agreement for the Portfolio is in effect until
February 28, 1996. Thereafter, it may continue in effect for
successive annual periods, provided such continuance is
specifically approved at least annually by a vote of The Money
Market Portfolios' Board of Trustees or by a vote of the holders
of a majority of the outstanding voting securities of the
Portfolio, and in either event by a majority vote of the trustees
of The Money Market Portfolios who are not parties to the
management agreement or interested persons of any such party
(other than as trustees of The Money Market Portfolios), cast in
person at a meeting called for that purpose. The management
agreement may be terminated without penalty at any time by the
Portfolio or by Advisers on 60 days' written notice and will
automatically terminate in the event of its assignment as defined
in the 1940 Act.
The contractual management fees which would have been incurred by
the Portfolio absent a fee reduction by Advisers for the
Portfolio's fiscal year ended June 30, 1994 and the five-month
period ended November 30, 1994, were $463,296 and $675,587
respectively. The management fees actually paid by the Portfolio
to Advisers for the Portfolio's fiscal year ended June 30, 1994
and the five-month period ended November 30, 1994, were $415,665
and $643,157, respectively.
Franklin/Templeton Investor Services, Inc. ("Investor Services"
or "Shareholder Services Agent"), a wholly-owned subsidiary of
Resources, is the shareholder servicing agent for the Fund and
acts as the Fund's transfer agent and dividend-paying agent.
Investor Services is compensated on the basis of a fixed fee per
account.
Bank of America NT & SA, 555 California Street, 4th Floor, San
Francisco, California 94104, acts as custodian of the securities
and other assets of the Portfolio and the cash and certain
securities of the Fund. With respect to its other assets and
securities, the Fund acts as its own custodian. The custodian
does not participate in decisions relating to the purchase and
sale of portfolio securities.
Coopers & Lybrand L.L.P., 333 Market Street, San Francisco,
California 94105, are the Fund's independent auditors.
POLICIES REGARDING BROKERS USED
ON PORTFOLIO TRANSACTIONS
The Fund will not incur any brokerage or other costs in
connection with its purchase or redemption of shares of the
Portfolio. Under the Portfolio's management agreement with
Advisers, the selection of brokers and dealers to execute
transactions in the Portfolio's securities is made by Advisers in
accordance with criteria set forth in the management agreement
and any directions which the Board of Trustees of The Money
Market Portfolios may give.
Advisers makes the investment decisions and arranges for the
placement of buy and sell orders and the execution of portfolio
transactions for the Portfolio. In executing portfolio
transactions, Advisers seeks the most favorable prices consistent
with the best execution of the orders. So long as Advisers
believes it is obtaining the best execution, it will give
consideration in placing portfolio transactions to broker-dealers
furnishing research, statistical or factual information or wire
or other services to the Portfolio or Advisers, including
appraisals or valuations of portfolio securities of the
Portfolio. While the information and services provided by broker-
dealers are useful in varying degrees and would generally reduce
the amount of research or services otherwise performed by
Advisers and thus reduce its expenses, they are of indeterminable
value and will not reduce the management fees payable to Advisers
by the Portfolio.
Depending on Advisers' view of market conditions, the Portfolio
may or may not purchase securities with the expectation of
holding them to maturity, although its general policy is to hold
securities to maturity. The Portfolio may, however, sell
securities prior to maturity to meet redemptions or as a result
of a revised management evaluation of the issuer. The Portfolio
does not anticipate that it will incur a significant amount of
brokerage expense because brokerage commissions are not normally
incurred on investments in short-term money market instruments
which are generally traded on a "net" basis, that is, in
principal amounts without the addition or deduction of brokerage
commissions or transfer taxes. During the fiscal years ended June
30, 1993 and 1994, and the five month period ended November 30,
1994, the Portfolio paid no brokerage commissions.
Purchases of portfolio securities may be made directly from
issuers or from underwriters. Where possible, purchase and sale
transactions will be effected through dealers (including banks)
which specialize in the types of securities which the Portfolio
will be holding, unless better executions are available
elsewhere. Dealers and underwriters usually act as principal for
their own account. Purchases from underwriters will include a
concession paid by the issuer to the underwriter and purchases
from dealers will include the spread between the bid and the ask
price. If the execution and price offered by more than one dealer
or underwriter are comparable, the order may be allocated to a
dealer or underwriter which has provided such research or other
services as mentioned above. No broker or dealer affiliated with
the Fund, the Portfolio, or with Advisers may purchase securities
from, or sell securities to, the Fund or the Portfolio.
If purchases or sales of securities of the Portfolio and one or
more other investment companies or clients supervised by Advisers
are considered at or about the same time, transactions in such
securities will be allocated among the several investment
companies and clients in a manner deemed equitable to all by
Advisers, taking into account the respective sizes of the funds
and the amount of securities to be purchased or sold. It is
recognized that in some cases this procedure could possibly have
a detrimental effect on the price or volume of the security so
far as the Portfolio is concerned. In other cases it is possible
that the ability to participate in volume transactions and to
negotiate lower brokerage commissions will be beneficial to the
Portfolio.
As of June 30, 1994, the Portfolio did not own securities of its
regular broker-dealers.
DETERMINATION OF NET ASSET VALUE
As noted in the Prospectus, the net asset value per share for
purposes of both the purchase and redemption of shares is
determined by the Fund on each day that the Exchange is open for
business. Valuation is currently made as of 3:00 p.m. Pacific
time. As of the date hereof, the Fund is informed that the
Exchange intends to close in observance of the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. Net asset value per share of the Fund is calculated by
adding the value of all securities and other assets in the Fund's
portfolio (i.e., shares of the Portfolio), deducting the Fund's
liabilities, and dividing by the number of shares outstanding.
The valuation of the Portfolio's portfolio securities (including
any securities held in the separate account maintained for when-
issued securities) is based upon their amortized cost, which does
not take into account unrealized capital gains or losses. This
involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method provides
certainty in calculation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than
the price the Portfolio would receive if it sold the instrument.
During periods of declining interest rates, the daily yield on
shares of the Portfolio computed as described above may tend to
be higher than a like computation made by a fund with identical
investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio
instruments. Thus, if the use of amortized cost by the Portfolio
resulted in a lower aggregate portfolio value on a particular
day, a prospective investor in the Portfolio would be able to
obtain a somewhat higher yield than would result from investment
in a fund utilizing solely market values, and existing investors
in the Portfolio would receive less investment income. The
converse would apply in a period of rising interest rates.
The Portfolio's use of amortized cost, which facilitates the
maintenance of the Portfolio's per share net asset value of
$1.00, is permitted by a rule adopted by the Securities and
Exchange Commission ("SEC"). Pursuant to this rule, the Portfolio
must adhere to certain conditions. The Portfolio must maintain a
dollar-weighted average portfolio maturity of 90 days or less,
only purchase instruments having remaining maturities of 397
calendar days or less, and invest only in those United States
dollar-denominated instruments that The Money Market Portfolios'
Board of Trustees determines present minimal credit risks and
which are, as required by the federal securities laws, rated in
one of the two highest rating categories as determined by
nationally recognized statistical rating agencies, instruments
deemed comparable in quality to such rated instruments, or
instruments, the issuers of which, with respect to an outstanding
issue of short-term debt that is comparable in priority and
protection, have received a rating within the two highest
categories of nationally recognized statistical rating agencies.
As discussed in the Prospectus, securities subject to floating or
variable interest rates with demand features in compliance with
applicable rules of the SEC may have stated maturities in excess
of one year.
The trustees of The Money Market Portfolios have agreed to
establish procedures designed to stabilize, to the extent
reasonably possible, the Portfolio's price per share as computed
for the purpose of sales and redemptions at $1.00. Such
procedures will include review of the Portfolio's portfolio
holdings by the trustees, at such intervals as they may deem
appropriate, to determine whether the Portfolio's net asset value
calculated by using available market quotations deviates from
$1.00 per share based on amortized cost. The extent of any
deviation will be examined by the trustees. If such deviation
exceeds 1/2 of 1%, the trustees will promptly consider what
action, if any, will be initiated. In the event the trustees
determine that a deviation exists which may result in material
dilution or other unfair results to investors or existing
shareholders, they will take such corrective action as they
regard as necessary and appropriate, which may include the sale
of portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity,
withholding dividends, redemptions of shares in kind, or
establishing a net asset value per share by using available
market quotations.
ADDITIONAL INFORMATION
REGARDING PURCHASES AND
REDEMPTIONS OF FUND SHARES
EFFECTIVENESS OF PURCHASE ORDERS
The purchase price for shares of the Fund is the net asset value
of such shares next determined after receipt and acceptance of a
an exchange request in proper form. Once shares of the Fund are
purchased, they begin earning income immediately, and income
dividends will start being credited to the investor's account on
the day following the effective date of acquisition and continue
through the day all shares in the account are redeemed.
Request received by the Fund prior to 3:00 p.m. Pacific time on
any business day are normally effective on the same day. Request
received by the Fund after that time will normally be effective
on the next business day.
SHAREHOLDER ACCOUNTING
All purchases of Fund shares will be credited to the shareholder
in full and fractional shares of the Fund (rounded to the nearest
1/1000 of a share) in an account maintained for the shareholder
by the Fund's transfer agent. Share certificates will not be
issued. To open an account in the name of a corporation, a
resolution of the corporation's Board of Directors will be
required.
The Fund reserves the right to reject any order for the purchase
of shares of the Fund and to waive minimum investment
requirements. In addition, the offering of shares of the Fund may
be suspended at any time and resumed at any time thereafter.
SHAREHOLDER REDEMPTIONS
All requests for redemption should be sent to the Fund, c/o
Franklin/Templeton Investor Services, Inc., 777 Mariners Island
Blvd., P.O. Box 7777, San Mateo, California 94403-7777.
Redemptions will be made in cash at the net asset value per share
next determined after receipt by the Fund of a redemption request
in proper form, including all signature guarantees, and other
documentation as may be required by the transfer agent. The
amount received upon redemption may be more or less than the
shareholder's original investment.
The Fund will make payment for all redemptions within seven days
after receipt of such redemption request in proper form. The Fund
reserves the right, however, to suspend redemptions or postpone
the date of payment (1) for any periods during which the Exchange
is closed (other than for the customary weekend and holiday
closings), (2) when trading in the markets the Fund usually
utilizes is restricted or an emergency exists, as determined by
the SEC, so that disposal of the Fund's investments or the
determination of the Fund's net asset value is not reasonably
practicable, or (3) for such other periods as the SEC, by order,
may permit for the protection of the Fund's shareholders.
In connection with exchanges (see Prospectus "Exchange
Privilege"), it should be noted that since the proceeds from the
sale of shares of an investment company generally are not
available until the fifth business day following the redemption,
the Fund reserves the right to delay acquiring the shares of
another investment company pursuant to an exchange until said
fifth business day. The redemption of shares of the Fund to
complete an exchange for shares of any of the investment
companies will be effected at the close of business on the day
the request for exchange is received in proper form.
Use of the exchange privilege in conjunction with market timing
services offered through numerous securities dealers has become
increasingly popular as a means of capital management. In the
event that a substantial portion of the Fund's shareholders
should, within a short period, elect to redeem their shares of
the Fund pursuant to the exchange privilege, the Fund might have
to liquidate portfolio securities it might otherwise hold and
incur the additional costs related to such transactions.
REDEMPTIONS IN KIND
The Fund has committed itself to pay in cash (by check) all
requests for redemption by any shareholder of record, limited in
amount, however, during any 90-day period to the lesser of
$250,000 or 1% of the value of the Fund's net assets at the
beginning of such period. Such commitment is irrevocable without
the prior approval of the SEC. In the case of requests for
redemption in excess of such amounts, the trustees reserve the
right to make payments in whole or in part in securities or other
assets of the Fund from which the shareholder is redeeming in
case of an emergency, or if the payment of such a redemption in
cash would be detrimental to the existing shareholders of the
Fund. In such circumstances, the securities distributed would be
valued at the price used to compute the Fund's net asset value.
Should the Fund do so, a shareholder may incur brokerage fees in
converting the securities to cash.
As a condition of qualifying its securities for sell in the state
of Texas, the Fund has undertaken that, consistent with its by-
laws and applicable law, whenever the trustees of the Fund
determine that it is advisable to make a redemption in whole or
in part in securities of the Fund, such securities will be in
readily marketable securities, to the extent available.
REDEMPTIONS BY THE FUND
Due to the relatively high cost of handling small investments,
the Fund reserves the right to implement a policy whereby the
Fund would redeem, involuntarily, at net asset value, the shares
of any shareholder whose account has a value of less than one-
half of the initial minimum investment required for that
shareholder, but only where the value of such account has been
reduced by prior voluntary redemption of shares. Until further
notice, it is the present policy of the Fund not to exercise this
right with respect to any shareholder whose account has a value
of $50 or more. In any event, before the Fund implements such
policy and redeems such shares and sends the proceeds to the
shareholder, it will notify the shareholder that the value of the
shares in the account is less than the minimum amount and allow
the shareholder 30 days to make an additional investment in an
amount which will increase the value of the account to at least
$100.
SPECIAL SERVICES
The Fund's Shareholder Services Agent may charge separate fees to
shareholders, to be negotiated directly with such shareholders,
for providing special services in connection with their accounts.
Such fees for special services to such shareholders will not
increase the expenses borne by the Fund.
As noted in the Prospectus, special procedures have been designed
for banks and other institutions wishing to open multiple
accounts in the Fund. The institution may open a single master
account by filing one application form with the Fund, signed by
personnel authorized to act for the institution. Individual sub-
accounts may be opened at the time the master account is filed by
listing them or they may be added at a later date by written
advice or by filing forms supplied by the Fund. These sub-
accounts may be established by the institution with registration
either by name or number. The investment minimums applicable to
the Fund are applicable to each sub-account. The Fund will
provide each institution with a written confirmation for each
transaction in a sub-account and arrangements may be made at no
additional charge for the transmittal of duplicate confirmations
to the beneficial owner of the sub-account.
Further, the Fund will provide to each institution, on a
quarterly basis, or more frequently as requested, a statement
which will set forth each sub-account's share balance, income
earned for the period, income earned for the year to date, and
total current market value.
The Trust and Institutional Services Division of Distributors
provides specialized services, including recordkeeping, for
institutional investors of the Fund. The cost of these services
is not borne by the Fund.
Investor Services may pay certain financial institutions which
maintain omnibus accounts with the Fund on behalf of numerous
beneficial owners for recordkeeping operations performed with
respect to such beneficial owners. For each beneficial owner in
the omnibus account, the Fund may reimburse Investor Services an
amount not to exceed the per account fee which the Fund normally
pays Investor Services. Such financial institutions may also
charge a fee for their services directly to their clients.
ADDITIONAL INFORMATION
REGARDING DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
Distributions and distribution adjustments resulting from
realized gains and losses on the sale of portfolio securities or
from unrealized appreciation or depreciation in the value of
portfolio securities are required by the Portfolio to maintain a
$1.00 net asset value and may result in under or over
distributions of investment company taxable income by the
Portfolio to the Fund.
The Fund's daily dividend is derived from the income dividends
paid by the Portfolio. The Portfolio may also derive capital
gains and losses in connection with sales or other dispositions
of its portfolio securities, which are then taken into account in
determining distributions to the Fund, which may then be
distributed to Fund shareholders. Because the Portfolio, however,
under normal circumstances invests in short-term securities, it
does not expect to realize any long-term capital gains or losses.
Any net short-term or long-term capital gains which are realized
by the Portfolio (adjusted for any daily amounts of unrealized
appreciation or depreciation reported above and taking into
account any capital loss carryovers) will generally be
distributed to the Fund once each year and may be distributed
more frequently if necessary in order to avoid federal excise
taxes. Any distributions of capital gain to Fund shareholders
will also be reinvested in the form of additional Fund shares at
net asset value, unless the shareholder has previously elected on
the Shareholder Application or filed written instructions with
the Fund's transfer agent to have them paid in cash.
As noted in the Prospectus, the Fund declares dividends for each
day that the Fund's net asset value is calculated equal to all of
its daily income dividends from the Portfolio, payable to
shareholders of record as of the close of business the preceding
day.
Shareholders who so request may have their dividends paid out
monthly in cash. The shares reinvested and credited to their
account during the month will be redeemed as of the close of
business on the last bank business day of the month and the
proceeds will be paid to them in cash. If a shareholder withdrew
the entire amount in an account at any time during the month,
all dividends accrued with respect to such account during the
month to the time of withdrawal would be paid in the same manner
and at the same time as the proceeds of withdrawal. The Fund
shareholder will receive a monthly summary of the account,
including information as to dividends reinvested or paid.
The Board of Trustees reserves the right to revise the above
dividend policy or postpone the payment of dividends, if
warranted in its judgment, due to unusual circumstances, such as
a large expense, loss or unexpected fluctuation in net assets.
Dividend checks which are returned to the Fund marked "unable to
forward" by the postal service will be deemed to be a request to
change the dividend option and the proceeds will be reinvested in
additional shares until new instructions are received.
The Fund may deduct from a shareholder's account the costs of its
efforts to locate a shareholder if the shareholder's mail is
returned as undeliverable or the Fund is otherwise unable to
locate the shareholder or verify the current mailing address.
These costs may include a percentage of the account when a search
company charges a percentage fee in exchange for its location
services.
TAXATION
As stated in the Prospectus, the Fund intends to qualify and
elect and the Portfolio has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue
Code of 1986, (the "Code"), as amended. The trustees reserve the
right not to maintain the qualification of the Fund as a
regulated investment company if they determine such course of
action to be beneficial to the shareholders. In such case, the
Fund will be subject to federal and possibly state corporate
taxes on its taxable income and gains derived from the Portfolio,
and distributions to shareholders will be ordinary dividend
income to the extent of the Fund's available earnings and
profits.
The Code requires all funds to distribute at least 98% of their
taxable ordinary income earned during the calendar year and at
least 98% of their capital gain net income earned during the
twelve-month period ending October 31 of each year (in addition
to amounts from the prior year that were neither distributed nor
taxed to the Fund) to shareholders by December 31 of each year in
order to avoid the imposition of a federal excise tax. Under
these rules, certain distributions which are declared in December
but which, for operational reasons, may not be paid to the
shareholder until the following January, will be treated for tax
purposes as if paid by the Fund and received by the shareholder
on December 31 of the calendar year in which they are declared.
The Fund intends as a matter of policy to declare and pay these
dividends in December to avoid the imposition of this tax, but
does not guarantee that its distributions will be sufficient to
avoid any or all federal excise taxes.
Distributions to Fund shareholders, which are derived from the
Portfolio from the excess of net long-term capital gain over net
short-term capital loss, are treated as long-term capital gain
regardless of the length of time the shareholder has owned Fund
shares and regardless of whether such distributions are received
in cash or in additional shares.
Many states grant tax-free status to dividends paid to
shareholders of mutual funds from interest income earned by the
fund from direct obligations of the U.S. government, subject in
some states to minimum investment requirements that must be met
by the fund. Investments in GNMA/FNMA securities, bankers'
acceptances, commercial paper and repurchase agreements
collateralized by U.S. government securities do not generally
qualify for tax-free treatment. At the end of each calendar year,
the Fund will provide shareholders with the percentage of any
dividends paid which may qualify for such tax-free treatment.
Shareholders should then consult with their own tax advisors with
respect to the application of their state and local laws to these
distributions.
Since the Fund's income is derived from income dividends of the
Portfolio, rather than qualifying dividend income derived from
certain domestic corporations, no portion of the Fund's
distributions will generally be eligible for the corporate
dividends-received deduction.
The sale of shares of the Fund, either by redemption or exchange,
is a taxable event and may result in a capital gain or loss. Any
loss incurred on the sale or exchange of the Fund's shares, held
for six months or less, will be treated as a long-term capital
loss to the extent of capital gain dividends received with
respect to such shares. However, since the Fund seeks to maintain
a stable $1.00 share price for both purchases and redemptions,
shareholders are not expected to realize a capital gain or loss
upon sale.
THE FUND'S UNDERWRITER
Pursuant to an underwriting agreement in effect until April 30,
1997, Distributors acts as principal underwriter in a continuous
public offering for shares of the Fund.
Distributors pays the expenses of distribution of Fund shares,
including advertising expenses and the costs of printing sales
material and prospectuses used to offer shares to the public. The
Fund pays the expenses of preparing and printing amendments to
its registration statements and prospectuses (other than those
necessitated by the activities of Distributors) and of sending
prospectuses to existing shareholders.
The underwriting agreement will continue in effect for successive
annual periods provided that its continuance is specifically
approved at least annually by a vote of the Fund's Board of
Trustees or by a vote of the holders of a majority of the Fund's
outstanding voting securities, and in either event by a majority
vote of the Fund's trustees who are not parties to the
underwriting agreement or interested persons of any such party
(other than as trustees of the Fund), cast in person at a meeting
called for that purpose. The underwriting agreement terminates
automatically in the event of its assignment and may be
terminated by either party on 90 days' written notice.
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act whereby the Fund may pay up to a
maximum of 0.65% per annum of its average daily net assets for
expenses incurred in the promotion and distribution of its
shares.
Pursuant to the Plan, the Fund is permitted to pay to
Distributors or others annual distribution fees, payable
quarterly (up to the maximum as stated above) in order to
compensate Distributors or others for providing distribution and
related services and bearing certain expenses of the Fund,
including, but not limited to, the printing of prospectuses and
reports used for sales purposes, expenses of preparing and
distributing sales literature and related expenses,
advertisements, and other distribution-related expenses,
including a prorated portion of Distributors' overhead expenses
attributable to the distribution of Fund shares, as well as any
distribution or service fees paid to securities dealers or their
firms or others who have executed a servicing agreement with the
Fund, Distributors or its affiliates.
In addition to the payments to which Distributors or others are
entitled under the Plan, the Plan also provides that to the
extent the Fund, Advisers or Distributors or other parties on
behalf of the Fund, Advisers or Distributors, make payments that
are deemed to be payments for the financing of any activity
primarily intended to result in the sale of shares of the Fund
within the context of Rule 12b-1 under the 1940 Act, then such
payments shall be deemed to have been made pursuant to the Plan.
In no event shall the aggregate asset-based sales charges which
include payments made under the Plan, plus any other payments
deemed to be made pursuant to the Plan, exceed the amount
permitted to be paid pursuant to the Rules of Fair Practice of
the National Association of Securities Dealers, Inc., Article
III, Section 26(d)4.
The terms and provisions of the Plan relating to required
reports, term, and approval are consistent with Rule 12b-1. The
Plan does not permit unreimbursed expenses incurred in a
particular year to be carried over to or reimbursed in subsequent
years.
To the extent fees are for distribution or marketing functions,
as distinguished from administrative servicing or agency
transactions, certain banks will not be entitled to participate
in the Plan as a result of applicable federal law prohibiting
certain banks from engaging in the distribution of mutual fund
shares. Such banking institutions, however, are permitted to
receive fees under the Plan for administrative servicing or for
agency transactions. If a bank were prohibited from providing
such services, its customers who are shareholders would be
permitted to remain shareholders of the Fund, and alternate means
for continuing the servicing of such shareholders would be
sought. In such an event, changes in the services provided might
occur and such shareholders might no longer be able to avail
themselves of any automatic investment or other services then
being provided by the bank. It is not expected that shareholders
would suffer any adverse financial consequences as a result of
any of these changes. Securities laws of states in which the
Fund's shares are offered for sale may differ from the
interpretations of federal law expressed herein, and banks and
financial institutions selling shares of the Fund may be required
to register as dealers pursuant to state law.
The Plan was approved by shareholders on April 28, 1995 and by
the trustees of the Fund, including those trustees who are not
interested persons, as defined in the 1940 Act, at a meeting of
the fund's Board of Trustees, on April 18, 1995. The Plan is
effective for an initial period through April 30, 1996 and is
renewable annually by a vote of the Fund's Board of Trustees,
including a majority vote of the trustees who are non-interested
persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan, cast in person at a
meeting called for that purpose. It is also required that the
selection and nomination of such trustees be done by the non-
interested trustees. The Plan and any related agreement may be
terminated at any time, without any penalty, by vote of a
majority of the non-interested trustees on not more than 60 days'
written notice, by Distributors on not more than 60 days' written
notice, by any act that constitutes an assignment of the
Administration agreement with the Advisers or by vote of a
majority of the Fund's outstanding shares. Distributors or any
dealer or other firm may also terminate their respective
distribution or service agreement at any time upon written
notice.
The Plan and any related agreements may not be amended to
increase materially the amount to be spent for distribution
expenses without approval by a majority of the Fund's outstanding
shares, and all material amendments to the Plan or any related
agreements shall be approved by a vote of the non-interested
trustees, cast in person at a meeting called for the purpose of
voting on any such amendment.
Distributors is required to report in writing to the Board of
Trustees at least quarterly on the amounts and purpose of any
payment made under the Plan and any related agreements, as well
as to furnish the Board of Trustees with such other information
as may reasonably be requested in order to enable the Board of
Trustees to make an informed determination of whether the Plan
should be continued.
GENERAL INFORMATION
PERFORMANCE
As noted in the Prospectus, the Fund may, from time to time,
quote various performance figures to illustrate the Fund's past
performance.
CURRENT YIELD
Current yield reflects the interest income per share earned by
the Fund's portfolio investments.
Current yield is computed by determining the net change,
excluding capital changes, in the value of a hypothetical pre-
existing account having a balance of one share at the beginning
of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing the difference
by the value of the account at the beginning of the base period
to obtain the base period return, and then annualizing the result
by multiplying the base period return by (365/7).
EFFECTIVE YIELD
Effective yield is computed in the same manner except that the
annualization of the return for the seven-day period reflects the
results of compounding by adding one to the base period return,
raising the sum to a power equal to 365 divided by seven, and
subtracting one from the result.
Effective yield is obtained by using the SEC formula:
Effective Yield = [(Base Period Return + 1)365/7]-1
COMPARISONS
To help investors better evaluate how an investment in the Fund
might satisfy their investment objective, advertisements and
other materials regarding the Fund may discuss various measures
of Fund performance as reported by various financial
publications. Materials may also compare performance (as
calculated above) to performance as reported by other
investments, indices, and averages. Such comparisons may include,
but are not limited to, the following examples:
a) IBC/Donoghue's Money Fund Report (Registered Trademark) -
Industry averages for seven-day annualized and compounded yields
of taxable, tax-free, and government money funds.
b) Bank Rate Monitor - A weekly publication which reports various
bank investments such as CD rates, average savings account rates
and average loan rates.
c) Lipper - Mutual Fund Performance Analysis, Lipper - Fixed
Income Fund Performance Analysis and Lipper - Mutual Fund Yield
Survey - measure total return and average current yield for the
mutual fund industry and rank individual mutual fund performance
over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
d) Salomon Brothers Bond Market Roundup - A weekly publication
which reviews yield spread changes in the major sectors of the
money, government agency, futures, options, mortgage, corporate,
Yankee, Eurodollar, municipal, and preferred stock markets and
summarizes changes in banking statistics and reserve aggregates.
e) Consumer Price Index (or Cost of Living Index), published by
the U.S. Bureau of Labor Statistics - a statistical measure of
change, over time, in the price of goods and services, in major
expenditure groups.
f) Stocks, bonds, Bills, and Inflation published by Ibbotson
Associates - a historical measure of yield, price, and total
return for common and small company stock, long term government
bonds, Treasury bills, and inflation.
g) Financial publications: The Wall Street Journal and Business
Week, Changing Times, Financial World, Forbes, Fortune, and Money
Magazines - provide performance statistics over specified time
periods.
In assessing such comparisons of performance, an investor should
keep in mind that the composition of the investments in the
reported indices and averages is not identical to the Fund's
portfolio, that the indices and averages are generally unmanaged,
and that the items included in the calculations of such averages
may not be identical to the formula used by the Fund to calculate
its figures. In addition, there can be no assurance that the Fund
will continue this performance as compared to such other
averages.
The Fund may include in its advertising or sales material
information relating to investment objectives and performance
results of funds belonging to the Templeton Funds. Resources is
the parent company of the advisers and underwriter of both the
Franklin Funds and Templeton Funds.
OTHER FEATURES AND BENEFITS
The Fund may help investors achieve various investment goals,
such as accumulating money for retirement, saving for a down
payment on a home, college cost and/or other long-term goals. The
Franklin College Costs Planner may assist an investor in
determining how much money must be invested on a monthly basis in
order to have a projected amount available in the future to fund
a child's college education. (Projected college cost estimates
are based upon current costs published by the College Board.) The
Franklin Retirement Planning Guide leads an investor through the
steps to start a retirement savings program. Of course, an
investment in the Fund cannot guarantee that such goals will be
met.
REPORTS TO SHAREHOLDERS
As noted in the prospectus, the Fund sends annual and semi-annual
reports to its shareholders regarding the Fund's performance and
its portfolio holdings. Shareholders who would like to receive a
quarterly report on portfolio holdings of the Portfolio may phone
our Fund Information Department, at the number set forth in the
prospectus under "How to Get Information Regarding an Investment
in the Fund."
MISCELLANEOUS INFORMATION
The Fund is a member of the Franklin Templeton Group, one of the
largest mutual fund organizations in the United States and may be
considered in a program for diversification of assets. Founded in
1947, Franklin, one of the oldest mutual fund organizations, has
managed mutual funds for over 47 years and now services more than
2.5 million shareholder accounts. In 1992, Franklin, a leader in
managing fixed-income mutual funds and an innovator in creating
domestic equity funds, joined forces with Templeton Worldwide,
Inc., a pioneer in international investing. Together, the
Franklin Templeton Group has over $114 billion in assets under
management for more than 3.7 million shareholder accounts and
offers over 111 U.S.-based mutual funds. The Fund may identify
itself by its NASDAQ or CUSIP number.
The Dalbar Surveys, Inc. broker/dealer survey has ranked Franklin
number one in service quality for five of the past seven years.
From time to time, the number of Fund shares held in the "street
name" accounts of various securities dealers for the benefit of
their clients or in centralized securities depositories may
exceed 5% of the total shares outstanding. To the best knowledge
of the Fund, the only entity holding beneficially or of record
more than 5% of the Fund's outstanding shares is Franklin
Resources, Inc., 777 Mariners Island Boulevard, San Mateo,
California 94404 which provided the initial capital of the Fund.
Access persons of the Franklin Templeton Group, as defined in SEC
Rule 17(j) under the 1940 Act, who are employees of Resources or
its subsidiaries, are permitted to engage in personal securities
transactions subject to the following general restrictions and
procedures: (1) the trade must receive advance clearance from a
Compliance Officer and must be completed within 24 hours after
this clearance; (2) copies of all brokerage confirmations must be
sent to the Compliance Officer and within 10 days after the end
of each calendar quarter, a report of all securities transactions
must be provided to the Compliance Officer; (3) in addition to
items (1) and (2), access persons involved in preparing and
making investment decisions must file annual reports of their
securities holdings each January and also inform the Compliance
Officer (or other designated personnel) if they own a security
that is being considered for a fund or other client transaction
or if they are recommending a security in which they have an
ownership interest for purchase or sale by a fund or other
client.
OWNERSHIP AND AUTHORITY DISPUTES
In the event of disputes involving multiple claims of ownership
or authority to control a shareholder's account, the Fund has the
right (but has no obligation) to: (a) freeze the account and
require the written agreement of all persons deemed by the Fund
to have a potential property interest in the account, prior to
executing instructions regarding the account; (b) interplead
disputed funds or accounts with a court of competent
jurisdiction; or (c) surrender ownership of all or a portion of
the account to the Internal Revenue Service in response to a
Notice of Levy.
APPENDIX A
SUMMARY OF PROCEDURES TO MONITOR CONFLICTS OF INTEREST
The Board of Trustees of The Money Market Portfolios, on behalf
of its series ("master fund[s]"), and the Board of Trustees of
the Fund ("feeder fund"), (both of which, except in the case of
one trustee, are composed of the same individuals) recognize that
there is the potential for certain conflicts of interest to arise
between the master fund and the feeder fund in this format. Such
potential conflicts of interest could include, among others: the
creation of additional feeder funds with different fee
structures; the creation of additional feeder funds which could
have controlling voting interests in any pass-through voting
which could affect investment and other policies; a proposal to
increase fees at the master fund level; and any consideration of
changes in fundamental policies at the master fund level which
may or may not be acceptable to a particular feeder fund.
In recognition of the potential for conflicts of interest to
develop, the Board of Trustees of the Trust and The Money Market
Portfolio have adopted certain procedures, pursuant to which i)
management of the master fund and the feeder fund will, on a
yearly basis, report to each board, including the independent
members of each board, on the operation of the master/feeder fund
structure; ii) the independent trustees will have ongoing
responsibility for reviewing all proposals at the master fund
level to determine whether any proposal presents a potential for
a conflict of interest and to the extent any other potential
conflicts arise prior to the normal annual review, they will act
promptly to review the potential conflict; iii) if the
independent trustees determine that a situation or proposal
presents a potential conflict, they will request a written
analysis from the master fund management describing whether such
apparent potential conflict of interest will impede the operation
of the constituent feeder fund and the interests of the feeder
fund's shareholders; and iii) upon receipt of the analysis, such
trustees shall review the analysis and present their conclusion
to the full boards.
If no actual conflict is deemed to exist, the independent
trustees will recommend that no further action be taken. If the
analysis is inconclusive, they may submit the matter to and be
guided by the opinion of an independent legal counsel issued in a
written opinion. If a conflict is deemed to exist, they may
recommend one or more of the following courses of action: i)
suggest a course of action designed to eliminate the potential
conflict of interest; ii) if appropriate, request that the full
boards submit the potential conflict to shareholders for
resolution; iii) recommend to the full boards that the affected
feeder fund no longer invest in its designated master fund and
propose either a search for a new master fund in which to invest
the feeder fund's assets or the hiring of an investment manager
to manage the feeder fund's assets in accordance with its
objectives and policies; iv) recommend to the boards that a new
group of trustees be recommended to the shareholders of the Trust
and The Money Market Portfolios for approval; or v) recommend
such other action as may be considered appropriate.
APPENDIX B
A-1, A-2 AND PRIME-1, PRIME-2
COMMERCIAL PAPER RATINGS:
Commercial paper rated by Standard & Poor's Corporation, a
nationally recognized statistical rating organizations ("NRSRO"),
has the following characteristics: Liquidity ratios are adequate
to meet cash requirements. Long-term senior debt is rated "A" or
better. The issuer has access to at least two additional channels
of borrowing. Basic earnings and cash flow have an upward trend
with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of
management are unquestioned. Relative strength or weakness of the
above factors determines whether the issuer's commercial paper is
rated A-1 or A-2.
The ratings Prime-1 and Prime-2 are the two highest commercial
paper ratings assigned by Moody's Investor Services, Inc.
("Moody's"). Among the factors considered by Moody's in assigning
ratings are the following: (1) evaluation of the management of
the issuer; (2) economic evaluation of the issuer's industry or
industries and an appraisal of speculative-type risks which may
be inherent in certain areas; (3) evaluation of the issuer's
products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of
earnings over a period of ten years; (7) financial strength of a
parent company and the relationships which exist with the issuer;
and (8) recognition by the management of obligations, and
preparations to meet such obligations, which may be present or
may arise as a result of public interest questions. Relative
strength or weakness of the above factors determines whether the
issuer's commercial paper is rated Prime-1 or Prime-2.
Coopers & Lybrand L.L.P.
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Trustee of
Franklin Templeton Money Fund Trust:
We have audited the accompanying statement of assets and
liabilities of Franklin Templeton Money fund Trust as of April
13, 1995. This financial statement is the responsibility of the
Trust's management. Our responsibility is to express an opinion
on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statement is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our
procedures included confirmation of cash held as of April 13,
1995 with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statement referred to above
presents fairly, in all material respects, the financial position
of Franklin Templeton Money Fund Trust as of April 13, 1995 in
conformity with generally accepted accounting principles.
San Francisco, California
April 17, 1995
FRANKLIN TEMPLETON MONEY FUND TRUST
FRANKLIN TEMPLETON MONEY FUND II
Statement of Assets and Liabilities
April 13, 1995
Assets:
Cash held by custodian $100,000
_______
Net Assets $100,000
_______
Shares of beneficial interest, $0.01 par value,
unlimited shares authorized 100,000
_______
Net asset value per share $ 1.00
______
Net asset value, and redemption price
per share ($100,000/100,000) $ 1.00
______
Note: Franklin Templeton Money Fund II ("the Fund") is an open-
end, diversified series of the Franklin Templeton Money Fund
Trust, a management investment company registered under the
Investment Company Act of 1940 and organized a Delaware business
trust on January 30, 1995. As part of its organization, the Fund
has issued, in a private placement, 100,000 shares of beneficial
interest to Franklin Resources, Inc. at $1.00 per share. These
shares have been designated as "initial shares".
THE MONEY MARKET PORTFOLIOS
<TABLE>
<CAPTION>
Statement of Investments in Securities and Net Assets, June 30, 1994
Face Value
Amount The Money Market Portfolio (Note 1)
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
aShort Term Investments 99.8%
Bank Notes 11.4%
$ 5,000,000 Bayerische Landesbank, New York Branch, 3.55%, 01/18/95 ....................................... $4,997,832
10,000,000 Credit Agricole, Chicago Branch, 3.56%, 07/15/94 ............................................... 9,999,896
5,000,000 Pittsburgh National Bank, Pittsburgh Branch, 3.65%, 11/10/94 ................................... 5,000,000
5,000,000 Westdeutsche Landesbank, New York Branch, 3.70%, 01/11/95 ...................................... 4,998,405
------------
Total Bank Notes (Cost $24,996,133) ............................................................ 24,996,133
------------
Bankers' Acceptances 3.2%
7,000,000 Sanwa Bank, Ltd., New York Branch, 4.37%, 07/15/94 (Cost $6,988,104) ........................... 6,988,104
------------
Certificates of Deposit 9.1%
5,000,000 Banque Nationale de Paris, New York Branch, 3.50%, 08/26/94 .................................... 4,999,835
10,000,000 National Westminister Bank, New York Branch, 4.03%, 07/05/94 ................................... 10,000,022
5,000,000 Societe Generale, New York Branch, 3.57%, 10/25/94 ............................................. 4,999,833
------------
Total Certificates of Deposit (Cost $19,999,690) ............................................... 19,999,690
------------
Commercial Paper 48.1%
10,000,000 American Express Credit Corp., 4.25%, 07/25/94 ................................................. 9,971,667
10,000,000 Associates Corp. of North America, 4.39%, 08/02/94 ............................................. 9,960,978
10,000,000 BASF Corp., 4.32%, 08/19/94 .................................................................... 9,941,200
10,000,000 Canadian Imperial Holdings, Inc., 3.98%, 07/01/94 .............................................. 10,000,000
5,959,000 CIESCO L.P., 4.32%, 08/18/94 ................................................................... 5,924,676
10,000,000 General Electric Capital Corp., 4.32% - 4.40%, 08/17/94 - 08/23/94 ............................. 9,939,411
10,000,000 Goldman Sachs & Co., 4.50%, 09/06/94 ........................................................... 9,917,646
10,000,000 Morgan Stanley Group, Inc., Variable Rate Notes, 4.313%, 10/27/94 .............................. 10,000,000
10,000,000 Philip Morris Cos., Inc., 4.32%, 08/16/94 ...................................................... 9,944,800
5,000,000 Svenska Handelsbanken, Inc., 4.30%, 08/12/94 ................................................... 4,974,917
10,000,000 Treasury Corp. of Victoria, 4.33%, 08/15/94 .................................................... 9,945,750
5,000,000 Westpac Capital Corp., 4.40%, 08/01/94 ......................................................... 4,981,056
------------
Total Commercial Paper (Cost $105,502,101) ..................................................... 105,502,101
------------
U.S. Government & Agency Securities 9.1%
10,000,000 Federal Home Loan Mortgage Corp., Discount Notes, 3.99%, 07/20/94 .............................. 9,978,942
5,000,000 U.S. Treasury Bills, 3.45%, 11/17/94 ........................................................... 4,933,010
5,000,000 U.S. Treasury Notes, 3.875%, 04/30/95 .......................................................... 4,958,726
------------
Total U.S. Government & Agency Securities (Cost $19,870,678) ................................... 19,870,678
------------
Total Investments before Repurchase Agreements (Cost $177,356,706) ............................. 177,356,706
------------
bReceivables from Repurchase Agreements 18.9%
44,400,000 J.P. Morgan Securities, Inc., 4.30%, 07/01/94 (Maturity Value $41,434,949)
Collateral: U.S. Treasury Bills, 06/15/95 ..................................................... 41,430,000
5,032 cJ.P. Morgan Securities, Inc., 5.46%, 07/01/94 (Maturity Value $5,033) .......................... 5,032
------------
Total Receivables from Repurchase Agreements (Cost $41,435,032) ................................ 41,435,032
------------
Total Investments (Cost $218,791,738) 99.8% .................................................... 218,791,738
Others Assets and Liabilities, Net .2% .......................................................... 397,485
------------
Net Assets 100.0% ............................................................................... $219,189,223
============
</TABLE>
<PAGE>
At June 30, 1994, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
aCertain short-term securities are traded on a discount basis; the rates shown
are the discount rates at the the time of purchase by the Fund. Other securities
bear interest at the rates shown, payable at fixed dates or upon maturity.
bFace amount for repurchase agreements is for the underlying collateral.
cSee Note 1(f) regarding sweep repurchase agreement.
The accompanying notes are an integral part of these financial statements.
THE MONEY MARKET PORTFOLIOS
Statement of Investments in Securities and Net Assets, June 30, 1994
<TABLE>
<CAPTION>
Face Value
Amount The U.S. Government Securities Money Market Portfolio (Note 1)
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
aShort Term Government Securities 14.1%
$31,000,000 U.S. Treasury Bills, 3.245% - 3.48%, 07/28/94 - 01/12/95 (Cost $30,743,305) .......................$ 30,743,305
------------
bReceivables from Repurchase Agreements86.1%
9,585,000 Barclays de Zoete Wedd Securities, Inc., 4.05%, 07/01/94 (Maturity Value $10,001,125)
Collateral: U.S. Treasury Notes, 11.25%, 05/15/95 ............................................ 10,000,000
25,091,000 Daiwa Securities of America, Inc., 4.28%, 07/01/94 (Maturity Value $25,093,983)
Collateral: U.S. Treasury Notes, 6.875%, 10/31/96 ............................................ 25,091,000
24,140,000 Daiwa Securities of America, Inc., 4.28%, 07/01/94 (Maturity Value $24,911,961)
Collateral: U.S. Treasury Notes, 8.00%, 10/15/96 ............................................. 24,909,000
9,816,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.15%, 07/01/94 (Maturity Value $10,001,153)
Collateral: U.S. Treasury Notes, 7.625%, 04/30/96 ............................................ 10,000,000
10,340,000 HSBC Securites, Inc., 4.15%, 07/01/94 (Maturity Value $10,001,153)
Collateral: U.S. Treasury Notes, 3.875%, 09/30/95 ............................................ 10,000,000
1,666 cJ.P. Morgan Securities, Inc., 5.21%, 07/01/94 (Maturity Value $1,666).......................... 1,666
51,710,000 J.P. Morgan Securities, Inc., 4.30%, 07/01/94 (Maturity Value $48,255,763)
Collateral: U.S. Treasury Bills, 06/01/95 .................................................... 48,250,000
10,395,000 Merrill Lynch Government Securities, Inc., 4.00%, 07/01/94 (Maturity Value $10,001,111)
Collateral: U.S. Treasury Notes, 4.375%, 08/15/96 ............................................ 10,000,000
10,080,000 Nikko Securities Co. International, Inc., 4.25%, 07/01/04 (Maturity Value $10,001,181)
Collateral: U.S. Treasury Notes, 4.25%, 01/31/95 ............................................. 10,000,000
10,075,000 Nomura Securites International, Inc., 4.15%, 07/01/94 (Maturity Value $10,001,153)
Collateral: U.S. Treasury Notes, 4.25%, 01/31/95 ............................................. 10,000,000
10,520,000 Sanwa-BGK Securities Co., L.P., 4.125%, 07/01/94 (Maturity Value $10,001,146)
Collateral: U.S. Treasury Bills, 02/09/95 .................................................... 10,000,000
10,080,000 Smith, Barney, Shearson, Inc., 4.20%, 07/01/94 (Maturity Value $10,001,167)
Collateral: U.S. Treasury Notes, 6.75%, 05/31/97 ............................................. 10,000,000
10,340,000 Yamaichi International (America), Inc., 4.25%, 07/01/94 (Maturity Value $10,001,181)
Collateral: U.S. Treasury Notes, 4.125%, 06/30/95 ............................................. 10,000,000
------------
Total Receivables from Repurchase Agreements (Cost $188,251,666)............................... 188,251,666
------------
Total Investments (Cost $218,994,971)100.2% ................................................... $218,994,971
Liabilities in Excess of Other Assets, Net(.2)% ............................................... (446,906)
------------
Net Assets100.0% .............................................................................. $218,548,065
============
</TABLE>
At June 30, 1994, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
aCertain short-term securities are traded on a discount basis; the rates shown
are the discount rates at the time of purchase by the Fund. Other securities
bear interest at the rates shown, payable at fixed dates or upon maturity.
bFace amount for repurchase agreements is for the underlying collateral.
cSee Note 1(f) regarding sweep repurchase agreement.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE MONEY MARKET PORTFOLIOS
Financial Statements
Statements of Assets and Liabilities
June 30, 1994
The The U.S.
Money Government
Market Securities Money
Portfolio Market Portfolio
------------ ------------
Assets:
Investments in securities
at value and cost $177,356,706 $ 30,743,305
Receivables from repurchase
agreements at value
and cost 41,435,032 188,251,666
Interest receivable 739,111 22,076
Prepaid expenses 6,582 4,047
------------ ------------
Total assets 219,537,431 219,021,094
------------ ------------
Liabilities:
Payables:
Distributions to
shareholders 119 674
Management fees 33,467 36,039
Accrued expenses and
other liabilities 9,922 11,285
Bank overdraft 304,700 425,031
------------ ------------
Total liabilities 348,208 473,029
------------ ------------
Net assets, at value $219,189,223 $218,548,065
============ ============
Shares outstanding 219,189,223 218,548,065
============ ============
Net asset value per share $1.00 $1.00
============ ============
Statement of Operations
for the year ended June 30, 1994
The The U.S.
Money Government
Market Securities Money
Portfolio Market Portfolio
------------ ---------------
Investment income:
Interest $10,461,897 $7,979,475
------------ ---------------
Expenses:
Management fees (Note 4) 415,665 304,633
Reports to shareholders 11,607 9,471
Custodian fees 20,711 29,630
Professional fees 4,933 4,389
Trustees' fees and expenses 4,563 3,836
Other 5,856 4,900
------------ ---------------
Total expenses 463,335 356,859
------------ ---------------
Net investment
income 9,998,562 7,622,616
------------ ---------------
Realized gain (loss)
on investments (5,146) 350
------------ ---------------
Net increase in net assets
resulting from operations $9,993,416 $7,622,966
============ ===============
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE MONEY MARKET PORTFOLIOS
Financial Statements (cont.)
Statements of Changes in Net Assets
for the years ended June 30, 1994 and the period ended June 30, 1993
<TABLE>
<CAPTION>
The U.S. Government Securities
The Money Market Portfolio Money Market Portfolio
-------------------------- ----------------------
Year Period* Year Period*
ended ended ended ended
6/30/94 6/30/93 6/30/94 6/30/93
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income........................................ $9,998,562 $5,761,076 $7,622,616 $5,159,343
Net realized gain (loss) from security transactions.......... (5,146) 992 350 1,282
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations......... 9,993,416 5,762,068 7,622,966 5,160,625
Distributions to shareholders from
undistributed net investment income.......................... (9,993,416) (5,762,068) (7,622,966) (5,160,625)
------------ ------------ ------------ ------------
Increase (decrease) in net assets from
capital share transactions (Notes 2 and 5)................... (3,168,832) 222,358,055 (91,771,434) 310,319,499
------------ ------------ ------------ ------------
Net increase (decrease) in net assets......................... (3,168,832) 222,358,055 (91,771,434) 310,319,499
Net assets (there is no undistributed net investment income at beginning or end
of the year):
Beginning of year............................................. 222,358,055 -- 310,319,499 --
------------ ------------ ------------ ------------
End of year................................................... $219,189,223 $222,358,055 $218,548,065 $310,319,499
============ ============ ============ ============
</TABLE>
*For the period July 28, 1992 (effective date of registration) to June 30, 1993.
The accompanying notes are an integral part of these financial statements.
THE MONEY MARKET PORTFOLIOS
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
The Money Market Portfolios (the Money Market) is a no load, open-end
diversified management investment company (mutual fund), registered under the
Investment Company Act of 1940, as amended. The Money Market has two portfolios
(the Portfolios) consisting of: The Money Market Portfolio and The U.S.
Government Securities Money Market Portfolio. Each of the Portfolios issues a
separate series of shares and maintains a totally separate and distinct
investment portfolio. The shares of the Money Market are issued in private
placements and are thus exempt from registration under the Securities Act of
1933.
The following is a summary of significant accounting policies consistently
followed by the Money Market in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Security Valuation:Portfolio securities are valued at amortized cost, which
approximates value. Each of the Portfolios must maintain a dollar weighted
average maturity of 90 days or less and only purchase instruments having
remaining maturities of 397 days or less. If the Portfolio has a remaining
weighted average maturity of greater than 90 days, the Portfolio will be stated
at value based on recorded closing sales on a national securities exchange or,
in the absence of a recorded sale, within the range of the most recent quoted
bid and asked prices. The trustees have established procedures designed to
stabilize, to the extent reasonably possible each Portfolio's price per share as
computed for the purpose of sales and redemptions at $1.00.
b. Income Taxes:The Money Market intends to continue to qualify for the tax
treatment applicable to regulated investment companies under the Internal
Revenue Code and to make the requisite distributions to its shareholders which
will be sufficient to relieve it from income and excise taxes. Therefore no
income tax provision is required.
<PAGE>
Each portfolio is treated as a separate entity in the determination of
compliance with the Internal Revenue Code.
c. Security Transactions:Security transactions are accounted for on the date the
securities are purchased or sold (trade date). Realized gains and losses on
security transactions are determined on the basis of specific identification for
both financial statement and income tax purposes.
d. Investment Income, Expenses and Distributions:Net investment income includes
income, calculated on an accrual basis, and amortization of original issue and
market discount or premium, if any and expenses as incurred on an accrual basis.
The total available for dividends is computed daily and includes the net
investment income, plus or minus any gains or losses on security transactions
and changes in unrealized portfolio appreciation or depreciation, if any.
Dividends are normally declared for each day the New York Stock Exchange is open
for business, equal to the total net investment income (as defined above), and
are payable to shareholders of record as of the close of business the preceding
day. Such dividends are automatically reinvested monthly in additional shares of
the Portfolio at net asset value.
Realized gains from securities transactions (if any) are distributed to
shareholders at least once each year and may be distributed more frequently if
necessary in order to maintain each Portfolio's net asset value of $1.00 per
share or to avoid federal excise taxes.
e. Expense Allocation:Common expenses incurred by the Money Market are allocated
among the Portfolios based on the ratio of net assets of each Portfolio to the
combined net assets. In all other respects, expenses are charged to each
Portfolio as incurred on a specific identification basis.
f. Repurchase Agreements:The Portfolios may enter into repurchase agreements
with government securities dealers recognized by the Federal Reserve Board
and/or member banks of the Federal Reserve System. In a repurchase agreement,
the Portfolios purchase a U.S. government security from a dealer or bank subject
to an agreement to resell it at a mutually agreed upon price and date. Such a
transaction is accounted for as a loan by the Portfolio to the seller,
collateralized by the underlying security. The transaction requires the initial
collateralization of the seller's obligation by U.S. government securities with
market value, including accrued interest, of at least 102% of the dollar amount
invested by the Portfolio, with the value of the underlying security marked to
market daily to maintain coverage of at least 100%. The collateral is delivered
to the Portfolios' custodian and held until resold to the dealer or bank. At
June 30, 1994, all outstanding repurchase agreements held by the Portfolios had
been entered into on that date.
The Money Market may enter into a sweep agreement with their custodian bank. In
a sweep, the excess cash in the Portfolio's Direct Deposit Account at the end of
the day is invested overnight. The Money Market Portfolio's excess cash is
invested in a AAA rated time deposit of Morgan Guaranty Trust's Nassau branch.
The U.S. Government Securities Money Market Portfolio's excess cash is invested
in a U.S. government backed repurchase agreement with Morgan Guaranty of New
York. Funds are returned to the Portfolios' Direct Deposit Accounts as the first
transaction of the next business day.
<PAGE>
2. TRUST SHARES
At June 30, 1994, there was an unlimited number of .01 par value shares of
beneficial interest authorized, and paid-in capital aggregated as follows:
The Money The U.S. Government
Market Securities Money
Portfolio Market Portfolio
------------ ------------
Paid-in capital....... $219,189,223 $218,548,065
============ ============
Transactions in The Money Market shares at $1.00 per share for the year ended
June 30, 1994 and the period July 28, 1992 (effective date) to June 30, 1993 are
as follows:
<TABLE>
<CAPTION>
The Money The U.S. Government
Market Securities Money
Portfolio Market Portfolio
-------------- --------------
<S> <C> <C>
Year ended June 30, 1994
Shares sold............................................. $ 1,699,503,699 $ 2,476,681,838
Shares issued in reinvestment of distributions.......... 9,993,345 7,620,764
Shares redeemed......................................... (1,712,665,876) (2,576,074,036)
-------------- --------------
Net decrease............................................ $ (3,168,832) $ (91,771,434)
============== ==============
Period ended June 30, 1993
Shares sold....................................... $ 610,110,001 $ 1,502,516,898
Shares transferred (Note 5)....................... 227,467,249 212,535,214
Shares issued in reinvestment of distributions.... 5,762,068 5,160,625
Shares redeemed................................... (620,981,263) (1,409,893,238)
-------------- --------------
Net increase...................................... $ 222,358,055 $ 310,319,499
============== ==============
</TABLE>
3. PURCHASES AND SALES OF SECURITIES
Aggregate purchases and sales/maturities of securities, including repurchase
agreements, for the year ended June 30, 1994 were as follows:
The Money The U.S. Government
Market Securities Money
Portfolio Market Portfolio
--------------- ---------------
Purchases.................. $10,681,105,704 $45,949,489,661
=============== ===============
Sales...................... $10,688,902,854 $46,053,029,978
=============== ===============
<PAGE>
4.TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Franklin Advisers, Inc., under the terms of an agreement, provides investment
advice, administrative services, office space and facilities to the Portfolios,
and receives fees computed and paid monthly based on the average daily net
assets of the Portfolios during the month. The Money Market Portfolio and The
U.S. Government Securities Money Market Portfolio pay a fee equal to an
annualized rate of 15/100 of 1% of their average net assets.
The terms of the Agreement provide that annual aggregate expenses of the
Portfolios be limited to the extent necessary to comply with the limitations set
forth in the laws, regulations and administrative interpretations of the states
in which the Portfolios' shares are registered. The Portfolios' expenses did not
exceed these limitations; however, for the year ended June 30, 1994, Franklin
Advisers, Inc. reduced their fees as indicated below, in an effort to minimize
each Portfolio's expenses.
The Money The U.S. Government
Market Securities Money
Portfolio Market Portfolio
--------- ---------
Contractual fees........... $ 463,296 $ 355,778
Reduction of fees.......... (47,631) (51,145)
--------- ---------
Management fees paid....... $ 415,665 $ 304,633
========= =========
Certain officers and trustees of the Portfolios are also officers and/or
directors of Franklin/Templeton Distributors, Inc., Franklin Advisers, Inc., and
Franklin/Templeton Investor Services, Inc., all wholly-owned subsidiaries of
Franklin Resources, Inc.
5. ASSETS TRANSFER
On October 26, 1992, the Institutional Fiduciary Trust's Money Market Portfolio
(the Money Market Fund) and the Franklin U.S. Government Securities Money Market
Portfolio (the U.S. Government Fund) transferred substantially all of their
assets, respectively, into The Money Market Portfolio and The U.S. Government
Securities Money Market Portfolio. The transfers were accompanied by a tax-free
exchange of 227,467,249 capital shares of The Money Market Portfolio for net
assets valued at $227,467,249 of the Money Market Fund and 212,535,214 capital
shares of The U.S. Government Securities Money Market Portfolio for net assets
valued at $212,535,214 of the U.S. Government Fund.
As of June 30, 1994, 218,253,619 and 935,103 shares of The Money Market
Portfolio were owned by the Money Market Fund and the AEA Cash Management Fund
respectively, and 218,548,065 shares of The U.S. Government Securities Money
Market Portfolio were owned by the U.S. Government Fund. This represents 99.6%,
0.4% and 100%, respectively, of the outstanding shares of The Money Market. The
remaining 501 shares of The Money Market Portfolio were owned by Franklin
Resources, Inc.
6. SUBSEQUENT EVENTS
On July 28, 1994, the shareholders of the Franklin Money Fund and the Franklin
Federal Money Fund approved the transfer of each Fund's assets into The Money
Market Portfolio and The U.S. Government Securities Money Market Portfolio,
respectively, effective end of business, July 29, 1994. The transfers were
accompanied by a tax-free exchange of capital shares of The Money Market
Portfolio and The U.S. Government Securities Money Market Portfolio for the net
assets of the Franklin Money Fund and the Franklin Federal Money Fund,
respectively.
<PAGE>
7. FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout the period.
<TABLE>
<CAPTION>
Per Share Operating Performance Ratios/Supplemental Data
------------------------------- ------------------------
Net Asset Distributions Net Ratio of Ratio of
Year Values at Net From Net Net Asset Assets at Expenses Net Income
Ended Beginning Investment Investment Values at Total End of Year to Average to Average
June 30, of Year Income Income End of Year Return++ (in 000's) Net Assets+ Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Money Market Portfolio
1993* $1.00 $0.027 $(0.027) $1.00 2.92%** $222,358 0.15%** 3.18%**
1994 1.00 0.033 (0.033) 1.00 3.33 219,189 0.15 3.25
The U.S. Government Securities Money Market Portfolio
1993* 1.00 0.021 (0.021) 1.00 2.27** 310,319 0.15** 3.05**
1994 1.00 0.032 (0.032) 1.00 3.25 218,548 0.15 3.20
</TABLE>
*July 28, 1992 (Effective date of registration) to June 30, 1993.
**Annualized
++Total return measures the change in value of an investment over the period
indicated. It assumes reinvestment of dividends and capital gains at net asset
value.
+During the period indicated, the Manager reduced its management fees of
the Portfolios. Had such action not been taken, the ratios of expenses to
average net assets would have been as follows.
Ratio of
Expenses
to Average
Net Assets
----------
The Money Market Portfolio
1993*................................... .17%**
1994.................................... .17
The U.S. Government Securities
Money Market Portfolio
1993*................................... .18%**
1994.................................... .17
<PAGE>
THE MONEY MARKET PORTFOLIOS
Report of Independent Accountants
To the Shareholders and Board of Trustees
The Money Market Portfolios
We have audited the accompanying statements of assets and liabilities of the two
portfolios comprising The Money Market Portfolios, including each Portfolio's
statement of investments in securities and net assets, as of June 30, 1994, and
the related statements of operations and changes in net assets, and the
financial highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Portfolios'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. Our procedures included
confirmation of investments and cash held by the custodian as of June 30, 1994.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
two Portfolios comprising The Money Market Portfolios as of June 30, 1994, and
the results of their operations, the changes in their net assets and the
financial highlights for the period indicated thereon in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND
San Francisco, California
August 3, 1994
FRANKLIN TEMPLETON MONEY FUND II
Franklin Templeton Money Fund Trust
File Nos. 33-88924
811-8962
FORM N- 1A
PART C
Other Information
Item 24 Financial Statements and Exhibits
a) Financial Statements
(i) Registrant's Report of Independent Auditors.
(ii) Registrant's Statements of Assets and Liabilities.
(iii) The Money Market Portfolio Statement of Investments
in Securities and Net Assets - December 31, 1994
(unaudited).
(iv) The Money Market Portfolios Statements of Assets
and Liabilities - December 31, 1994 (unaudited).
(v) The Money Market Portfolios Statements of
Operations - for the six months ended December 31,
1994 (unaudited).
(vi) Statements of Changes in Net Assets - for the six
months ended December 31, 1994 (unaudited) and for
the year ended June 30, 1994.
(vii) The Money Market Portfolios Notes to Financial
Statements (unaudited).
(viii) The Money Market Portfolios Report of Independent
Auditors - August 3, 1994.
(ix) The Money Market Portfolio Statement of Investments
in Securities and Net Assets - June 30, 1993.
(x) The Money Market Portfolios Statements of Assets
and Liabilities - June 30, 1994.
(xi) The Money Market Portfolios Statements of
Operations - for the year ended June 30, 1994.
(xii) The Money Market Portfolios Statements of Changes
in Net Assets - for the years ended June 30, 1994
and the period ended June 30, 1993.
(xiii) The Money Market Portfolios Notes to Financial
Statements.
b) Exhibits:
The above financial statements and the following exhibits are
included or attached.
(1) copies of the charter as now in effect;
(i) Certificate of Trust of Franklin Templeton Money
Fund Trust
(ii) Agreement and Declaration of Trust of Franklin
Templeton Money Fund Trust
(2) copies of the existing By-Laws or instruments corresponding
thereto;
(i) By-Laws of Franklin Templeton Money Fund Trust
(3) copies of any voting trust agreement with respect
to more than five percent of any class of equity
securities of the Registrant;
Not Applicable
(4) specimens or copies of each security issued by the
Registrant, including copies of all constituent instruments,
defining the rights of the holders of such securities, and
copies of each security being registered;
Not applicable
(5) copies of all investment advisory contracts relating to the
management of the assets of the Registrant;
(i) Form of Administration Agreement between Registrant and
Franklin Advisers, Inc.
(6) copies of each underwriting or distribution contract between
the Registrant and a principal underwriter, and specimens or
copies of all agreements between principal underwriters and
dealers;
(i) Underwriting Agreement between Registrant and
Franklin/Templeton Distributors, Inc.
(ii) Dealer Agreement between Franklin/Templeton
Distributors, Inc. and dealers.
Registrant: Franklin Federal Tax-Free Income Fund]
Filing: Post-Effective Amendment No. 17 to
Registration on Form N-1A
File No. 2-75925
Filing Date: March 28, 1995
(7) copies of all bonus, profit sharing, pension or other
similar contracts or arrangements wholly or partly for the
benefit of directors or officers of the Registrant in their
capacity as such; any such plan that is not set forth in a
form
Not Applicable
(8) copies of all custodian agreements and depository contracts
under Section 17(f) of the 1940 Act, with respect to
securities and similar investments of the Registrant,
including the schedule of remuneration;
(i) Custodian Agreement between Registrant and Bank of
America NT & SA
(9) copies of all other material contracts not made in the
ordinary course of business which are to be performed in
whole or in part at or after the date of filing the
Registration Statement;
Not Applicable
(10) an opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will
when sold be legally issued, fully paid and nonassessable;
Not Applicable
(11) copies of any other opinions, appraisals or rulings and
consents to the use thereof relied on in the preparation of
this registration statement and required by Section 7 of the
1933 Act;
(i) Consent of Independent Auditors for Franklin Templeton
Money Fund Trust and The Money Market Portfolios
(12) all financial statements omitted from Item 23;
Not Applicable
(13) copies of any agreements or understandings made in
consideration for providing the initial capital between or
among the Registrant, the underwriter, adviser, promoter or
initial stockholders and written assurances from promoters
or initial stockholders that their purchases were made for
investment purposes without any present intention of
redeeming or reselling;
(i) Letter of Understanding dated April 13, 1995
(14) copies of the model plan used in the establishment of any
retirement plan in conjunction with which Registrant offers
its securities, any instructions thereto and any other
documents making up the model plan. Such form(s) should
disclose the costs and fees charged in connection therewith;
(i) Copy of model retirement plan
Registrant: AGE High Income Fund, Inc.
Filing: Post-Effective Amendment No. 26 to
Registration Statement on Form
N-1A
File No. 2-30203
Filing Date: August 1, 1989
(15) copies of any plan entered into by Registrant pursuant to
Rule 12b-1 under the 1940 Act, which describes all material
aspects of the financing of distribution of Registrant's
shares, and any agreements with any person relating to
implementation of such plan.
(i) Distribution Plan pursuant to Rule 12b-1 between
Registrant and Franklin Advisers, Inc.
(16) schedule for computation of each performance quotation
provided in the registration statement in response to Item
22 (which need not be audited).
Not Applicable
(17) Powers of Attorney
(i) Power of Attorney for Franklin Templeton Money Fund
(ii) Power of Attorney for The Money Market Portfolios
(iii) Certificate of Secretary for Franklin Templeton Money
Fund Trust
(iv) Certificate of Secretary for The Money Market
Portfolios
Item 25 Persons Controlled by or under Common Control with
Registrant
None
Item 26 Number of Holders of Securities
The number of record holders of the only class of securities of
the Registrant are as follows:
Number of
Title of Class Record Holders
Beneficial Interest one
Item 27 Indemnification
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court or
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Notwithstanding the provisions contained in the Registrant's By-
Laws, in the absence of authorization by the appropriate court
on the merits pursuant to Article VI of said By- Laws, any
indemnification under said Article shall be made by Registrant
only if authorized in the manner provided in Article VI.
Item 28 Business and Other Connections of Investment Adviser
Certain of the officers and directors of the Registrant's
Administrator also serve as officers and/or directors for (1)
the administrator's corporate parent, Franklin Resources, Inc.,
and/or (2) other investment companies in the Franklin Group of
Funds. In addition, Mr. Charles B. Johnson is director of
General Host Corporation. For additional information please see
Part B.
Item 29 Principal Underwriters
a) Franklin/Templeton Distributors, Inc., (Distributors) also
acts as principal underwriter of shares of AGE High Income Fund,
Inc., Franklin Custodian Funds, Inc., Franklin Equity Fund,
Franklin Gold Fund, Franklin Municipal Securities Trust,
Franklin California Tax- Free Income Fund, Inc., Franklin New
York Tax-Free Income Fund, Inc., Franklin California Tax-Free
Trust, Franklin Investors Securities Trust, Franklin
International Trust, Franklin Premier Return Fund, Franklin Tax-
Free Trust, Franklin New York Tax-Free Trust, Franklin Strategic
Mortgage Portfolio, Franklin Strategic Series, Franklin Tax-
Advantaged International Bond Fund, Franklin Tax-Advantaged U.S.
Government Securities Fund, Franklin Tax-Advantaged High Yield
Securities Fund, Franklin Managed Trust, Franklin Federal Tax-
Free Income Fund, Franklin Balance Sheet Investment Fund,
Institutional Fiduciary Trust, Franklin Money Fund, Franklin
Federal Money Fund, Franklin Tax- Exempt Money Fund, Franklin
Real Estate Securities Trust, Franklin/Templeton Global Trust,
Templeton Variable Products Series Fund, Templeton Real Estate
Securities Fund, Templeton Growth Fund, Inc., Templeton Funds,
Inc., Templeton Smaller Companies Growth Fund, Inc., Templeton
Income Trust, Templeton Global Opportunities Trust, Templeton
Institutional Funds, Inc., Templeton American Trust, Inc.,
Templeton Capital Accumulator Fund, Inc., Templeton Developing
Markets Trust, Templeton Variable Annuity Fund,
Franklin/Templeton Japan Fund and Templeton Global Investment
Trust.
(b) The information required by this Item 29 with respect to
each director and officer of Distributors is incorporated by
reference to Part B of this N-1A and Schedule A of Form BD filed
by Distributors with the Securities and Exchange Commission
pursuant to the Securities Act of 1934 (SEC File No. 8-5889).
(c) Not Applicable. Registrant's principal underwriter is an
affiliated person of an affiliated person of the Registrant.
Item 30 Location of Accounts and Records
The accounts, books or other documents required to be maintained
by Section 31 (a) of the Investment Company Act of 1940 are kept
by the Fund or its shareholder services agent,
Franklin/Templeton Investor Services, Inc. both of whose address
is 777 Mariners Island Boulevard, San Mateo, CA 94404-1585.
Item 31 Management Services
There are no management-related service contracts not discussed
in Part A or Part B.
Item 32 Undertakings
(a) The Registrant hereby undertakes to file a post-effective
amendment using financial statements which need not be certified,
within four to six months from the effective date of Registrant's
Registration Statement under the Securities Act of 1933.
(b) The Registrant hereby undertakes to promptly call a meeting
of shareholders for the purpose of voting upon the question of
removal of any trustee or trustees when requested in writing to
do so by the record holders of not less than 10 per cent of the
Registrant's outstanding shares and to assist its shareholders in
the communicating with other shareholders in accordance with the
requirements of Section 16(c) of the Investment Company Act of
1940.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly
caused this Amendment to its Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in
the City of San Mateo and the State of California, on the 24th
day of April, 1995.
FRANKLIN TEMPLETON MONEY FUND TRUST
(Registrant)
By: Rupert H. Johnson, Jr.*
Rupert H. Johnson, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by
the following persons in the capacities and on the dates
indicated.
Rupert H. Johnson, Jr.* Principal Executive Officer and
Rupert H. Johnson, Jr. Trustee
Dated: April 24, 1995
Martin L. Flanagan* Principal Financial and
Martin L. Flanagan Accounting Officer
Dated: April 24, 1995
Diomedes Loo-Tam* Principal Accounting Officer
Diomedes Loo-Tam Dated: April 24, 1995
Frank H. Abbott III* Trustee
Frank H. Abbott III Dated: April 24, 1995
Harris J. Ashton* Trustee
Harris J. Ashton Dated: April 24, 1995
S. Joseph Fortunato* Trustee
S. Joseph Fortunato Dated: April 24, 1995
David W. Garbellano* Trustee
David W. Garbellano Dated: April 24, 1995
Charles B. Johnson* Trustee
Charles B. Johnson Dated: April 24, 1995
Frank W.T. LaHaye* Trustee
Frank W.T. LaHaye Dated: April 24, 1995
Gordon S. Macklin* Trustee
Gordon S. Macklin Dated: April 24, 1995
*By /s/ Larry L. Greene
(Attorney-in-Fact Pursuant to Power of Attorney filed herewith)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, the undersigned
has duly consented to the filing of this post-effective amendment
to the Registration Statement of Franklin Templeton Money Fund
Trust to be signed by the undersigned, thereunto duly authorized
in the City of San Mateo and the State of California, on the 24th
day of April 1995.
THE MONEY MARKET PORTFOLIOS
By: Charles E. Johnson*
Charles E. Johnson, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:
Charles E. Johnson* Trustee and Principal Executive
Charles E. Johnson Officer
Dated: April 24, 1995
Martin L. Flanagan* Principal Financial Officer
Martin L. Flanagan Dated: April 24, 1995
Diomedes Loo-Tam* Principal Accounting Officer
Diomedes Loo-Tam Dated: April 24, 1995
Frank H. Abbott III* Trustee
Frank H. Abbott III Dated: April 24, 1995
Harris J. Ashton* Trustee
Harris J. Ashton Dated: April 24, 1995
S. Joseph Fortunato* Trustee
S. Joseph Fortunato Dated: April 24, 1995
David W. Garbellano* Trustee
David W. Garbellano Dated: April 24, 1995
Charles B. Johnson* Trustee
Charles B. Johnson Dated: April 24, 1995
Rupert H. Johnson, Jr.* Trustee
Rupert H. Johnson, Jr. Dated: April 24, 1995
Frank W.T. LaHaye* Trustee
Frank W.T. LaHaye Dated: April 24, 1995
Gordon S. Macklin* Trustee
Gordon S. Macklin Dated: April 24, 1995
*By /s/Larry L. Greene - Attorney- in- Fact
(Pursuant to Powers of Attorney filed herewith)
FRANKLIN TEMPLETON MONEY FUND TRUST
REGISTRATION STATEMENT
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION PAGE NO. IN
SEQUENTIAL
NUMBERING
SYSTEM
EX-99.B1(i) Certificate of Trust of Attached
Franklin Templeton Money
Fund Trust
EX-99.B1(ii) Agreement and Declaration Attached
of Trust of Franklin
Templeton Money Fund Trust
EX-99.B2(i) By-Laws Attached
EX-99.B5(i) Form of Administration Attached
Agreement between
Registrant and Franklin
Advisers, Inc.
EX-99.B6(i) Underwriting Agreement Attached
between Registrant and
Franklin/Templeton
Distributors, Inc.
EX-99.B6(ii) Dealer Agreements between *
Franklin/Templeton
Distributors, Inc. and
dealers incorporated by
reference to Registrant:
Franklin Federal Tax-Free
Income Fund
Filing: Post-Effective
Amendment No. 17 to
Registration on form N-1A
File No. 2-75925
Filing Date: March 28,
1995
EX-99.B8(i) Custodian Agreement Attached
between Registrant and
Bank of America NT & SA
EX-99.B11(i) Consent of Auditors for Attached
Registrant and The Money
Market Portfolio
EX-99-B13(i) Letter of Understanding Attached
Dated April 13, 1995
EX-99.B14(i) Franklin IRA Form *
EX-99.B15(i) Distribution Plan pursuant Attached
to Rule 12b-1 between
Registrant and Franklin
Advisers, Inc.
EX-99.B17(i) Power of Attorney for Attached
Franklin Templeton Money
Fund Trust dated January
17, 1995
EX-99.B17(ii) Power of Attorney for The Attached
Money Market Portfolios
dated January 17, 1995
EX-99.B17(iii) Certificate of Secretary Attached
for Franklin Templeton
Money Fund Trust
dated January
17, 1995
EX-99.B17(iv) Certificate of Secretary Attached
for The Money Market
Portfolios dated January
17, 1995
*Incorporated by Reference
CERTIFICATE OF TRUST
OF
FRANKLIN TEMPLETON MONEY FUND TRUST
a Delaware Business Trust
THIS Certificate of Trust of the FRANKLIN TEMPLETON
MONEY FUND TRUST (the "Trust"), dated as of this day of
, 1995, is being duly executed and filed, in order to form a
business trust pursuant to the Delaware Business Trust Act (the
"Act"), Del. Code Ann. tit. 12, (section)(section)3801-3819.
1. NAME. The name of the business trust formed
hereby is "FRANKLIN TEMPLETON MONEY FUND TRUST."
2. REGISTERED OFFICE AND REGISTERED AGENT. The
Trust will become, prior to the issuance of beneficial interests,
a registered investment company under the Investment Company Act
of 1940, as amended. Therefore, in accordance with section
3807(b) of the Act, the Trust has and shall maintain in the State
of Delaware a registered office and a registered agent for
service of process.
(A) REGISTERED OFFICE. The registered
office of the Trust in Delaware is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware
19801.
(B) REGISTERED AGENT. The registered agent
for service of process on the Trust in Delaware is The
Corporation Trust Company.
3. LIMITATION ON LIABILITY. Pursuant to section
3804 of the Act, in the event that the Trust's governing
instrument, as defined in section 3801(f) of the Act, creates one
or more series as provided in section 3806(b)(2) of the Act, the
debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular series of
the Trust shall be enforceable against the assets of such series
only, and not against the assets of the Trust generally.
IN WITNESS WHEREOF, the Trustees named below do hereby
execute this Certificate of Trust as of the date first-above
written.
Frank H. Abbott, III Rupert H. Johnson, Jr.
1045 Sansome Street 777 Mariners Island Blvd.
San Francisco, CA 94111 San Mateo, CA 94404
Harris J. Ashton Charles B. Johnson
Metro Center, One Station Place 777 Mariners Island Blvd.
Stamford, CT 06904 San Mateo, CA 94404
S. Joseph Fortunato David W. Garbellano
Park Avenue at Morris County 111 New Montgomery St. #402
P.O. Box 1945 San Francisco, CA 94105
Morristown, NJ 07962-1945
Frank W.T. LaHaye Gordon S. Macklin
20833 Stevens Creek Blvd. 8212 Burning Tree Road
Suite 102 Bethesda, MD 20817
Cupertino, CA 95014
Effective as of
___________1995
AGREEMENT AND DECLARATION OF TRUST
of
FRANKLIN TEMPLETON MONEY FUND TRUST
a Delaware Business Trust
Principal Place of Business:
777 Mariners Island Boulevard
San Mateo, California 94404
TABLE OF CONTENTS
Page
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . 1
Name and Definitions . . . . . . . . . . . . . . . . . 1
Section 1. Name. . . . . . . . . . . . . . . . . 1
Section 2. Definitions . . . . . . . . . . . . . 1
(a) Trust. . . . . . . . . . . . . . . 1
(b) Trust Property . . . . . . . . . . 1
(c) Trustees . . . . . . . . . . . . . 1
(d) Shares . . . . . . . . . . . . . . 2
(e) Shareholder. . . . . . . . . . . . 2
(f) Person . . . . . . . . . . . . . . 2
(g) 1940 Act . . . . . . . . . . . . . 2
(h) Commission and Principal
Underwriter . . . . . . . . . . . 2
(i) Declaration of Trust . . . . . . . 2
(j) By-Laws. . . . . . . . . . . . . . 2
(k) Interested Person. . . . . . . . . 2
(l) Investment Manager . . . . . . . . 2
(m) Series . . . . . . . . . . . . . . 2
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . 2
Purpose of Trust . . . . . . . . . . . . . . . . . . . 2
ARTICLE III . . . . . . . . . . . . . . . . . . .. . . . . 3
Shares . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1. Division of Beneficial Interest . . . 3
Section 2. Ownership of Shares . . . . . . . . . 3
Section 3. Investments in the Trust . . . . . . 4
Section 4. Status of Shares and Limitation of
Personal Liability . . . . . . . . . . . . 4
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares. . . . . . . . . . . . 4
Section 6. Establishment and Designation of
Shares. . . . . . . . . . . . . . . . 5
(a) Assets Held with Respect to a
Particular Series. . . . . . . . . 5
(b) Liabilities Held with Respect to a
Particular Series. . . . . . . . . 6
(c) Dividends, Distributions,
Redemptions, and Repurchases . . . 6
(d) Voting. . . . . . . . . .. . . . . 7
(e) Equality. . . . . . . .. . . . . . 7
(f) Fractions .. . . . . . . . . . . . 7
(g) Exchange Privilege. . . .. . . . . 7
(h) Combination of Series. . . . . . . 7
(i) Elimination of Series. . . . . . . 7
Section 7. Indemnification of Shareholders . . . 8
ARTICLE IV. . . . . . . . . . . . . . . . . . . . . . . . . 8
The Board of Trustees . . . . . . . . . . . . . . . 8
Page
Section 1. Number, Election and Tenure . . . . . 8
Section 2. Effect of Death, Resignation, etc. of
a Trustee . . . . . . . . . . . . . . 9
Section 3. Powers. . . . . . . . . . . . . . . . 9
Section 4. Payment of Expenses by the Trust. . . 13
Section 5. Payment of Expenses by Shareholders . 13
Section 6. Ownership of Assets of the Trust. . . 13
Section 7. Service Contracts. . .. . . . . . . . 13
ARTICLE V 15
Shareholders' Voting Powers and Meetings . . . . . . . 15
Section 1. Voting Powers . . . . . . . . . . . . 15
Section 2. Voting Power and Meetings . . . . . . 15
Section 3. Quorum and Required Vote. . . . . . . 16
Section 4. Action by Written Consent . . . . . . 16
Section 5. Record Dates. . . . . . . . . . . . . 16
Section 6. Additional Provisions. . .. . . . . . 17
ARTICLE VI 17
Net Asset Value, Distributions, and Redemptions. . . . 17
Section 1. Determination of Net Asset Value, Net
Income, and Distributions . . . . . . 17
Section 2. Redemptions and Repurchases . . . . . 17
Section 3. Redemptions at the Option of the
Trust . . . . . . . . . . . . . . . . 17
ARTICLE VII 18
Compensation and Limitation of Liability of Trustees . 18
Section 1. Compensation . . . . . . . . . . . . 18
Section 2. Indemnification and Limitation of . .
Liability . . . . . . . . . . . . . 18
Section 3. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety . . . . . . 19
Section 4. Insurance . . . . . . . . . . . . . . 19
ARTICLE VIII. . . . . . . . . . . . . . . . . . . . . . . . 20
Miscellaneous. . . . . . . . . . . . . . . . . . . . . 20
Section 1. Liability of Third Persons Dealing
with Trustees . . . . . . . . . . . . 19
Section 2. Termination of Trust or Series. . . . 20
Section 3. Merger and Consolidation. . . . . . . 20
Section 4. Amendments. . . . . . . . . . . . . . 21
Section 5. Filing of Copies, References,
Headings. . . . . . . . . . . . . . . 21
Section 6. Applicable Law. . . . . . . . . . . . 21
Section 7. Provisions in Conflict with Law or
Regulations . . . . . . . . . . . . . 22
Section 8. Business Trust Only . . . . . . . . . 22
Section 9. Use of the name "Franklin". . . . . . 22
AGREEMENT AND DECLARATION OF TRUST
OF
Franklin Templeton Money Fund Trust
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is
made and entered into as of the date set forth below by the
Trustees named hereunder for the purpose of forming a Delaware
business trust in accordance with the provisions hereinafter set
forth,
NOW, THEREFORE, the Trustees hereby direct that a
Certificate of Trust be filed with the Office of the Secretary of
State of the State of Delaware and do hereby declare that the
Trustees will hold IN TRUST all cash, securities and other assets
which the Trust now possesses or may hereafter acquire from time
to time in any manner and manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the
holders of Shares in this Trust.
ARTICLE I.
Name and Definitions
Section 1. Name. This trust shall be known as
"Franklin Templeton Money Fund Trust" and the Trustees shall
conduct the business of the Trust under that name or any other
name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust
established by this Agreement and Declaration of Trust, as
amended from time to time;
(b) The "Trust Property" means any and all property,
real or personal, tangible or intangible, which is owned or held
by or for the account of the Trust, including without limitation
the rights referenced in Article VIII, Section 9 hereof;
(c) "Trustees" refers to the persons who have signed
this Agreement and Declaration of Trust, so long as they continue
in office in accordance with the terms hereof, and all other
persons who may from time to time be duly elected or appointed to
serve on the Board of Trustees in accordance with the provisions
hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in their capacity as trustees
hereunder;
(d) "Shares" means the shares of beneficial interest
into which the beneficial interest in the Trust shall be divided
from time to time and includes fractions of Shares as well as
whole Shares;
(e) "Shareholder" means a record owner of outstanding
Shares;
(f) "Person" means and includes individuals,
corporations, partnerships, trusts, associations, joint ventures,
estates and other entities, whether or not legal entities, and
governments and agencies and political subdivisions thereof,
whether domestic or foreign;
(g) The "1940 Act" refers to the Investment Company
Act of 1940 and the Rules and Regulations thereunder, all as
amended from time to time;
(h) The terms "Commission" and "Principal Underwriter"
shall have the respective meanings given them in Section 2(a)(7)
and Section (2)(a)(29) of the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement
and Declaration of Trust, as amended or restated from time to
time;
(j) "By-Laws" shall mean the By-Laws of the Trust as
amended from time to time and incorporated herein by reference;
(k) The term "Interested Person" has the meaning given
it in Section 2(a)(19) of the 1940 Act;
(l) "Investment Manager" or "Manager" means a party
furnishing services to the Trust pursuant to any contract
described in Article IV, Section 7(a) hereof;
(m) "Series" refers to each Series of Shares
established and designated under or in accordance with the
provisions of Article III and shall mean an entity such as that
described in Section 18(f)(2) of the 1940 Act, and subject to
Rule 18f-2 thereunder.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and
carry on the business of a management investment company
registered under the 1940 Act through one or more Series
investing primarily in securities.
ARTICLE III.
Shares
Section 1. Division of Beneficial Interest. The
beneficial interest in the Trust shall at all times be divided
into an unlimited number of Shares, with a par value of $ .01 per
Share. The Trustees may authorize the division of Shares into
separate Series and the division of Series into separate classes
of Shares. The different Series shall be established and
designated, and the variations in the relative rights and
preferences as between the different Series shall be fixed and
determined, by the Trustees. If only one or no Series (or
classes) shall be established, the Shares shall have the rights
and preferences provided for herein and in Article III, Section 6
hereof to the extent relevant and not otherwise provided for
herein, and all references to Series (and classes) shall be
construed (as the context may require) to refer to the Trust.
Subject to the provisions of Section 6 of this Article
III, each Share shall have voting rights as provided in Article V
hereof, and holders of the Shares of any Series shall be entitled
to receive dividends, when, if and as declared with respect
thereto in the manner provided in Article VI, Section 1 hereof.
No Shares shall have any priority or preference over any other
Share of the same Series with respect to dividends or
distributions upon termination of the Trust or of such Series
made pursuant to Article VIII, Section 4 hereof. All dividends
and distributions shall be made ratably among all Shareholders of
a particular (class of a) Series from the assets held with
respect to such Series according to the number of Shares of such
(class of such) Series held of record by such Shareholder on the
record date for any dividend or distribution or on the date of
termination, as the case may be. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares
or other securities issued by the Trust or any Series. The
Trustees may from time to time divide or combine the Shares of
any particular Series into a greater or lesser number of Shares
of that Series without thereby materially changing the
proportionate beneficial interest of the Shares of that Series in
the assets held with respect to that Series or materially
affecting the rights of Shares of any other Series.
Section 2. Ownership of Shares. The ownership of
Shares shall be recorded on the books of the Trust or a transfer
or similar agent for the Trust, which books shall be maintained
separately for the Shares of each Series (or class). No
certificates certifying the ownership of Shares shall be issued
except as the Board of Trustees may otherwise determine from time
to time. The Trustees may make such rules as they consider
appropriate for the transfer of Shares of each Series (or class)
and similar matters. The record books of the Trust as kept by
the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders of each Series
(or class) and as to the number of Shares of each Series (or
class) held from time to time by each.
Section 3. Investments in the Trust. Investments may
be accepted by the Trust from such Persons, at such times, on
such terms, and for such consideration as the Trustees from time
to time may authorize. Each investment shall be credited to the
individual Shareholder's account in the form of full and
fractional Shares of the Trust, in such Series (or class) as the
purchaser shall select, at the net asset value per Share next
determined for such Series (or class) after receipt of the
investment; provided, however, that the Trustees may, in their
sole discretion, impose a sales charge upon investments in the
Trust.
Section 4. Status of Shares and Limitation of Personal
Liability. Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every Shareholder
by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust,
nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against
the Trust or the Trustees, but entitles such representative only
to the rights of said deceased Shareholder under this Trust.
Ownership of Shares shall not entitle the Shareholder to any
title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the
Shareholders as partners. Neither the Trust nor the Trustees,
nor any officer, employee or agent of the Trust shall have any
power to bind personally any Shareholders, nor, except as
specifically provided herein, to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to
pay.
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares. Notwithstanding any other
provisions of this Declaration of Trust and without limiting the
power of the Board of Trustees to amend the Declaration of Trust
as provided elsewhere herein, the Board of Trustees shall have
the power to amend this Declaration of Trust, at any time and
from time to time, in such manner as the Board of Trustees may
determine in their sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise
modify any provisions relating to the Shares contained in this
Declaration of Trust, provided that before adopting any such
amendment without Shareholder approval the Board of Trustees
shall determine that it is consistent with the fair and equitable
treatment of all Shareholders or that Shareholder approval is not
otherwise required by the 1940 Act or other applicable law. If
Shares have been issued, Shareholder approval shall be required
to adopt any amendments to this Declaration of Trust which would
adversely affect to a material degree the rights and preferences
of the Shares of any Series (or class) or to increase or decrease
the par value of the Shares of any Series (or class).
Subject to the foregoing Paragraph, the Board of
Trustees may amend the Declaration of Trust to amend any of the
provisions set forth in paragraphs (a) through (i) of Section 6
of this Article III.
Section 6. Establishment and Designation of Shares.
The establishment and designation of any Series (or class) of
Shares shall be effective upon the resolution by a majority of
the then Trustees, adopting a resolution which sets forth such
establishment and designation and the relative rights and
preferences of such Series (or class). Each such resolution
shall be incorporated herein by reference upon adoption.
Shares of each Series (or class) established pursuant
to this Section 6, unless otherwise provided in the resolution
establishing such Series, shall have the following relative
rights and preferences:
(a) Assets Held with Respect to a Particular Series.
All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which
such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds
or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably be held with
respect to that Series for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of
account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source
derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds
or payments derived from any reinvestment of such proceeds, in
whatever form the same may be, are herein referred to as "assets
held with respect to" that Series. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds
or payments which are not readily identifiable as assets held
with respect to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to,
between or among any one or more of the Series in such manner and
on such basis as the Trustees, in their sole discretion, deem
fair and equitable, and any General Asset so allocated to a
particular Series shall be held with respect to that Series.
Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series for all purposes.
(b) Liabilities Held with Respect to a Particular
Series. The assets of the Trust held with respect to each
particular Series shall be charged against the liabilities of the
Trust held with respect to that Series and all expenses, costs,
charges and reserves attributable to that Series, and any general
liabilities of the Trust which are not readily identifiable as
being held with respect to any particular Series shall be
allocated and charged by the Trustees to and among any one or
more of the Series in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to
a Series are herein referred to as "liabilities held with respect
to" that Series. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive
and binding upon the holders of all Series for all purposes. All
Persons who have extended credit which has been allocated to a
particular Series, or who have a claim or contract which has been
allocated to any particular Series, shall look, and shall be
required by contract to look exclusively, to the assets of that
particular Series for payment of such credit, claim, or contract.
In the absence of an express contractual agreement so limiting
the claims of such creditors, claimants and contract providers,
each creditor, claimant and contract provider will be deemed
nevertheless to have impliedly agreed to such limitation unless
an express provision to the contrary has been incorporated in the
written contract or other document establishing the claimant
relationship.
(c) Dividends, Distributions, Redemptions, and
Repurchases. Notwithstanding any other provisions of this
Declaration of Trust, including, without limitation, Article VI,
no dividend or distribution including, without limitation, any
distribution paid upon termination of the Trust or of any Series
(or class) with respect to, nor any redemption or repurchase of,
the Shares of any Series (or class) shall be effected by the
Trust other than from the assets held with respect to such
Series, nor, except as specifically provided in Section 7 of this
Article III, shall any Shareholder of any particular Series
otherwise have any right or claim against the assets held with
respect to any other Series except to the extent that such
Shareholder has such a right or claim hereunder as a Shareholder
of such other Series. The Trustees shall have full discretion,
to the extent not inconsistent with the 1940 Act, to determine
which items shall be treated as income and which items as
capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders.
(d) Voting. All Shares of the Trust entitled to vote
on a matter shall vote separately by Series (and, if applicable,
by class): that is, the Shareholders of each Series (or class)
shall have the right to approve or disapprove matters affecting
the Trust and each respective Series (or class) as if the Series
(or classes) were separate companies. There are, however, two
exceptions to voting by separate Series (or classes). First, if
the 1940 Act requires all Shares of the Trust to be voted in the
aggregate without differentiation between the separate Series (or
classes), then all the Trust's Shares shall be entitled to vote
on a one-vote-per-Share basis. Second, if any matter affects
only the interests of some but not all Series (or classes), then
only the Shareholders of such affected Series (or classes) shall
be entitled to vote on the matter.
(e) Equality. All the Shares of each particular
Series shall represent an equal proportionate undivided interest
in the assets held with respect to that Series (subject to the
liabilities held with respect to that Series and such rights and
preferences as may have been established and designated with
respect to classes of Shares within such Series), and each Share
of any particular Series shall be equal to each other Share of
that Series.
(f) Fractions. Any fractional Share of a Series shall
carry proportionately all the rights and obligations of a whole
share of that Series, including rights with respect to voting,
receipt of dividends and distributions, redemption of Shares and
termination of the Trust.
(g) Exchange Privilege. The Trustees shall have the
authority to provide that the holders of Shares of any Series
shall have the right to exchange said Shares for Shares of one or
more other Series of Shares in accordance with such requirements
and procedures as may be established by the Trustees.
(h) Combination of Series. The Trustees shall have
the authority, without the approval of the Shareholders of any
Series unless otherwise required by applicable law, to combine
the assets and liabilities held with respect to any two or more
Series into assets and liabilities held with respect to a single
Series.
(i) Elimination of Series. At any time that there are
no Shares outstanding of any particular Series (or class)
previously established and designated, the Trustees may by
resolution of a majority of the then Trustees abolish that Series
(or class) and rescind the establishment and designation thereof.
Section 7. Indemnification of Shareholders. If any
Shareholder or former Shareholder shall be exposed to liability
by reason of a claim or demand relating to his or her being or
having been a Shareholder, and not because of his or her acts or
omissions, the Shareholder or former Shareholder (or his or her
heirs, executors, administrators, or other legal representatives
or in the case of a corporation or other entity, its corporate or
other general successor) shall be entitled to be held harmless
from and indemnified out of the assets of the Trust against all
loss and expense arising from such claim or demand.
ARTICLE IV
The Board of Trustees
Section 1. Number, Election and Tenure. The number of
Trustees constituting the Board of Trustees shall be fixed from
time to time by a written instrument signed, or by resolution
approved at a duly constituted meeting, by a majority of the
Board of Trustees, provided, however, that the number of Trustees
shall in no event be less than one (1) nor more than fifteen
(15). The Board of Trustees, by action of a majority of the then
Trustees at a duly constituted meeting, may fill vacancies in the
Board of Trustees or remove Trustees with or without cause. Each
Trustee shall serve during the continued lifetime of the Trust
until he or she dies, resigns, is declared bankrupt or
incompetent by a court of appropriate jurisdiction, or is
removed, or, if sooner, until the next meeting of Shareholders
called for the purpose of electing Trustees and until the
election and qualification of his or her successor. Any Trustee
may resign at any time by written instrument signed by him and
delivered to any officer of the Trust or to a meeting of the
Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to
the extent expressly provided in a written agreement with the
Trust, no Trustee resigning and no Trustee removed shall have any
right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of
such removal. The Shareholders may fix the number of Trustees
and elect Trustees at any meeting of Shareholders called by the
Trustees for that purpose. Any Trustee may be removed at any
meeting of Shareholders by a vote of two-thirds of the
outstanding Shares of the Trust. A meeting of Shareholders for
the purpose of electing or removing one or more Trustees may be
called (i) by the Trustees upon their own vote, or (ii) upon the
demand of Shareholders owning 10% or more of the Shares of the
Trust in the aggregate.
Section 2. Effect of Death, Resignation, etc. of a
Trustee. The death, declination, resignation, retirement,
removal, or incapacity of one or more Trustees, or all of them,
shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of
Trust. Whenever a vacancy in the Board of Trustees shall occur,
until such vacancy is filled as provided in Article IV, Section
1, the Trustees in office, regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all
the duties imposed upon the Trustees by this Declaration of
Trust. As conclusive evidence of such vacancy, a written
instrument certifying the existence of such vacancy may be
executed by an officer of the Trust or by a majority of the Board
of Trustees. In the event of the death, declination,
resignation, retirement, removal, or incapacity of all the then
Trustees within a short period of time and without the
opportunity for at least one Trustee being able to appoint
additional Trustees to fill vacancies, the Trust's Investment
Manager(s) are empowered to appoint new Trustees subject to the
provisions of Section 16(a) of the 1940 Act.
Section 3. Powers. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed
by the Board of Trustees, and such Board shall have all powers
necessary or convenient to carry out that responsibility
including the power to engage in securities transactions of all
kinds on behalf of the Trust. Trustees in all instances shall
act as principals, and are and shall be free from the control of
the Shareholders. The Trustees shall have full power and
authority to do any and all acts and to make and execute any and
all contracts and instruments that they may consider necessary or
appropriate in connection with the administration of the Trust.
Without limiting the foregoing, the Trustees may: adopt By-Laws
not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust and may
amend and repeal them to the extent that such By-Laws do not
reserve that right to the Shareholders; fill vacancies in or
remove from their number, and may elect and remove such officers
and appoint and terminate such agents as they consider
appropriate; appoint from their own number and establish and
terminate one or more committees consisting of two or more
Trustees which may exercise the powers and authority of the Board
of Trustees to the extent that the Trustees determine; employ one
or more custodians of the assets of the Trust and may authorize
such custodians to employ subcustodians and to deposit all or any
part of such assets in a system or systems for the central
handling of securities or with a Federal Reserve Bank, retain a
transfer agent or a shareholder servicing agent, or both; provide
for the issuance and distribution of Shares by the Trust directly
or through one or more Principal Underwriters or otherwise;
redeem, repurchase and transfer Shares pursuant to applicable
law; set record dates for the determination of Shareholders with
respect to various matters; declare and pay dividends and
distributions to Shareholders of each Series from the assets of
such Series; establish from time to time, in accordance with the
provisions of Article III, Section 6 hereof, any Series (or
class) of Shares, each such Series (or class) to operate as a
separate and distinct investment medium and with separately
defined investment objectives and policies and distinct
investment purpose; and in general delegate such authority as
they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the
Trust or to any such custodian, transfer or shareholder servicing
agent, or Principal Underwriter. Any determination as to what is
in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of this
Declaration of Trust, the presumption shall be in favor of a
grant of power to the Trustees. Unless otherwise specified or
required by law, any action by the Board of Trustees shall be
deemed effective if approved or taken by a majority of the
Trustees then in office. Any action required or permitted to be
taken at any meeting of the Board of Trustees, or any committee
thereof, may be taken without a meeting if all members of the
Board of Trustees or committee (as the case may be) consent
thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of the Board of Trustees, or
committee.
Without limiting the foregoing, the Trust shall have
power and authority:
(a) To invest and reinvest cash, to hold cash
uninvested, and to subscribe for, invest in, reinvest in,
purchase or otherwise acquire, own, hold, pledge, sell, assign,
transfer, exchange, distribute, write options on, lend or
otherwise deal in or dispose of contracts for the future
acquisition or delivery of fixed income or other securities, and
securities of every nature and kind, including, without
limitation, all types of bonds, debentures, stocks, preferred
stocks, negotiable or non-negotiable instruments, obligations,
evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, bankers'
acceptances, and other securities of any kind, issued, created,
guaranteed, or sponsored by any and all Persons, including,
without limitation, states, territories, and possessions of the
United States and the District of Columbia and any political
subdivision, agency, or instrumentality thereof, any foreign
government or any political subdivision of the U.S. Government or
any foreign government, or any international instrumentality, or
by any bank or savings institution, or by any corporation or
organization organized under the laws of the United States or of
any state, territory, or possession thereof, or by any
corporation or organization organized under any foreign law, or
in "when issued" contracts for any such securities, to change the
investments of the assets of the Trust; and to exercise any and
all rights, powers, and privileges of ownership or interest in
respect of any and all such investments of every kind and
description, including, without limitation, the right to consent
and otherwise act with respect thereto, with power to designate
one or more Persons, to exercise any of said rights, powers, and
privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage,
hypothecate, lease, or write options with respect to or otherwise
deal in any property rights relating to any or all of the assets
of the Trust or any Series, subject to any requirements of the
1940 Act;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to
such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(d) To exercise powers and right of subscription or
otherwise which in any manner arise out of ownership of
securities;
(e) To hold any security or property in a form not
indicating that it is trust property, whether in bearer,
unregistered or other negotiable form, or in its own name or in
the name of a custodian or subcustodian or a nominee or nominees
or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities
depository, subject in each case to proper safeguards according
to the usual practice of investment companies or any rules or
regulations applicable thereto;
(f) To consent to, or participate in, any plan for the
reorganization, consolidation or merger of any corporation or
issuer of any security which is held in the Trust; to consent to
any contract, lease, mortgage, purchase or sale of property by
such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(g) To join with other security holders in acting
through a committee, depositary, voting trustee or otherwise, and
in that connection to deposit any security with, or transfer any
security to, any such committee, depositary or trustee, and to
delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for taxes;
(i) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) To borrow funds or other property in the name of
the Trust exclusively for Trust purposes;
(k) To endorse or guarantee the payment of any notes
or other obligations of any Person; to make contracts of guaranty
or suretyship, or otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust
Property such insurance as the Trustees may deem necessary or
appropriate for the conduct of the business, including, without
limitation, insurance policies insuring the assets of the Trust
or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers,
principal underwriters, or independent contractors of the Trust,
individually against all claims and liabilities of every nature
arising by reason of holding Shares, holding, being or having
held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such Person as
Trustee, officer, employee, agent, investment adviser, principal
underwriter, or independent contractor, including any action
taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such
Person against liability; and
(m) To adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts
as a means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents of the
Trust.
The Trust shall not be limited to investing in
obligations maturing before the possible termination of the Trust
or one or more of its Series. The Trust shall not in any way be
bound or limited by any present or future law or custom in regard
to investment by fiduciaries. The Trust shall not be required to
obtain any court order to deal with any assets of the Trust or
take any other action hereunder.
Section 4. Payment of Expenses by the Trust. The
Trustees are authorized to pay or cause to be paid out of the
principal or income of the Trust or Series (or class), or partly
out of the principal and partly out of income, and to charge or
allocate the same to, between or among such one or more of the
Series (or class) that may be established or designated pursuant
to Article III, Section 6, as they deem fair, all expenses, fees,
charges, taxes and liabilities incurred or arising in connection
with the Trust or Series (or class), or in connection with the
management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of
the Trust's officers, employees, investment adviser or manager,
principal underwriter, auditors, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as
the Trustees may deem necessary or proper to incur.
Section 5. Payment of Expenses by Shareholders. The
Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder, or each Shareholder of any
particular Series, to pay directly, in advance or arrears, for
charges of the Trust's custodian or transfer, Shareholder
servicing or similar agent, an amount fixed from time to time by
the Trustees, by setting off such charges due from such
Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of shares in the
account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such
charges due from such Shareholder.
Section 6. Ownership of Assets of the Trust. Title to
all of the assets of the Trust shall at all times be considered
as vested in the Trust, except that the Trustees shall have power
to cause legal title to any Trust Property to be held by or in
the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such
terms as the Trustees may determine. The right, title and
interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee.
Upon the resignation, removal or death of a Trustee he or she
shall automatically cease to have any right, title or interest in
any of the Trust Property, and the right, title and interest of
such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as
may be set forth in the By-Laws, the Trustees may, at any time
and from time to time, contract for exclusive or nonexclusive
advisory, management and/or administrative services for the Trust
or for any Series with any corporation, trust, association or
other organization; and any such contract may contain such other
terms as the Trustees may determine, including without
limitation, authority for the Investment Manager or administrator
to determine from time to time without prior consultation with
the Trustees what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be
delegated to such party.
(b) The Trustees may also, at any time and from time
to time, contract with any corporation, trust, association or
other organization, appointing it exclusive or nonexclusive
distributor or Principal Underwriter for the Shares of one or
more of the Series (or classes) or other securities to be issued
by the Trust. Every such contract shall comply with such
requirements and restrictions as may be set forth in the By-Laws;
and any such contract may contain such other terms as the
Trustees may determine.
(c) The Trustees are also empowered, at any time and
from time to time, to contract with any corporations, trusts,
associations or other organizations, appointing it or them the
custodian, transfer agent and/or shareholder servicing agent for
the Trust or one or more of its Series. Every such contract
shall comply with such requirements and restrictions as may be
set forth in the By-Laws or stipulated by resolution of the
Trustees.
(d) The Trustees are further empowered, at any time
and from time to time, to contract with any entity to provide
such other services to the Trust or one or more of the Series, as
the Trustees determine to be in the best interests of the Trust
and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or
officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, Manager, adviser,
Principal Underwriter, distributor, or affiliate or
agent of or for any corporation, trust, association, or
other organization, or for any parent or affiliate of
any organization with which an advisory, management or
administration contract, or principal underwriter's or
distributor's contract, or transfer, shareholder
servicing or other type of service contract may have
been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or
other organization with which an advisory, management
or administration contract or principal underwriter's
or distributor's contract, or transfer, shareholder
servicing or other type of service contract may have
been or may hereafter be made also has an advisory,
management or administration contract, or principal
underwriter's or distributor's contract, or transfer,
shareholder servicing or other service contract with
one or more other corporations, trust, associations, or
other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon
or executing the same, or create any liability or accountability
to the Trust or its Shareholders, provided approval of each such
contract is made pursuant to the requirements of the 1940 Act.
Section 8 Voting Powers. Subject to the provisions of
Article III, Section 6(d), the Shareholders shall have power to
vote only (i) for the election or removal of Trustees as provided
in Article IV, Section 1, and (ii) with respect to such
additional matters relating to the Trust as may be required by
this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state,
or as the Trustees may consider necessary or desirable. Each
whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf
of a Shareholder shall be deemed valid unless challenged at or
prior to its exercise and the burden of proving invalidity shall
rest on the challenger.
Section 9. Voting Power and Meetings. Meetings of the
Shareholders may be called by the Trustees for the purpose of
electing Trustees as provided in Article IV, Section 1 and for
such other purposes as may be prescribed by law, by this
Declaration of Trust or by the By-Laws. Meetings of the
Shareholders may also be called by the Trustees from time to time
for the purpose of taking action upon any other matter deemed by
the Trustees to be necessary or desirable. A meeting of
Shareholders may be held at any place designated by the Trustees.
Written notice of any meeting of Shareholders shall be given or
caused to be given by the Trustees by mailing such notice at
least seven (7) days before such meeting, postage prepaid,
stating the time and place of the meeting, to each Shareholder at
the Shareholder's address as it appears on the records of the
Trust. Whenever notice of a meeting is required to be given to a
Shareholder under this Declaration of Trust or the By-Laws, a
written waiver thereof, executed before or after the meeting by
such Shareholder or his or her attorney thereunto authorized and
filed with the records of the meeting, shall be deemed equivalent
to such notice.
Section 10. Quorum and Required Vote. Except when a
larger quorum is required by applicable law, by the By-Laws or by
this Declaration of Trust, forty percent (40%) of the Shares
entitled to vote shall constitute a quorum at a Shareholders'
meeting. When any one or more Series (or classes) is to vote as
a single class separate from any other Shares, forty percent
(40%) of the Shares of each such Series (or classes) entitled to
vote shall constitute a quorum at a Shareholder's meeting of that
Series. Any meeting of Shareholders may be adjourned from time
to time by a majority of the votes properly cast upon the
question of adjourning a meeting to another date and time,
whether or not a quorum is present, and the meeting may be held
as adjourned within a reasonable time after the date set for the
original meeting without further notice. Subject to the
provisions of Article III, Section 6(d), when a quorum is present
at any meeting, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, except when a
larger vote is required by any provision of this Declaration of
Trust or the By-Laws or by applicable law.
Section 11. Action by Written Consent. Any action
taken by Shareholders may be taken without a meeting if
Shareholders holding a majority of the Shares entitled to vote on
the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or
by the By-Laws) and holding a majority (or such larger proportion
as aforesaid) of the Shares of any Series (or class) entitled to
vote separately on the matter consent to the action in writing
and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
Section 12. Record Dates. For the purpose of
determining the Shareholders of any Series (or class) who are
entitled to vote or act at any meeting or any adjournment
thereof, the Trustees may from time to time fix a time, which
shall be not more than ninety (90) days before the date of any
meeting of Shareholders, as the record date for determining the
Shareholders of such Series (or class) having the right to notice
of and to vote at such meeting and any adjournment thereof, and
in such case only Shareholders of record on such record date
shall have such right, notwithstanding any transfer of shares on
the books of the Trust after the record date. For the purpose of
determining the Shareholders of any Series (or class) who are
entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a date,
which shall be before the date for the payment of such dividend
or such other payment, as the record date for determining the
Shareholders of such Series (or class) having the right to
receive such dividend or distribution. Without fixing a record
date the Trustees may for voting and/or distribution purposes
close the register or transfer books for one or more Series for
all or any part of the period between a record date and a meeting
of Shareholders or the payment of a distribution. Nothing in
this Section shall be construed as precluding the Trustees from
setting different record dates for different Series (or classes).
Section 13. Additional Provisions. The By-Laws may
include further provisions for Shareholders' votes and meetings
and related matters.
ARTICLE V.
Net Asset Value, Distributions, and Redemptions
Section 1. Determination of Net Asset Value, Net
Income, and Distributions. Subject to Article III, Section 6
hereof, the Trustees, in their absolute discretion, may prescribe
and shall set forth in the By-laws or in a duly adopted vote of
the Trustees such bases and time for determining the per Share or
net asset value of the Shares of any Series or net income
attributable to the Shares of any Series, or the declaration and
payment of dividends and distributions on the Shares of any
Series, as they may deem necessary or desirable.
Section 2. Redemptions and Repurchases. The Trust
shall purchase such Shares as are offered by any Shareholder for
redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust or a
Person designated by the Trust that the Trust purchase such
Shares or in accordance with such other procedures for redemption
as the Trustees may from time to time authorize; and the Trust
will pay therefor the net asset value thereof, in accordance with
the By-Laws and applicable law. Payment for said Shares shall be
made by the Trust to the Shareholder within seven days after the
date on which the request is made in proper form. The obligation
set forth in this Section 2 is subject to the provision that in
the event that any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays, or if
permitted by the Rules of the Commission during periods when
trading on the Exchange is restricted or during any emergency
which makes it impracticable for the Trust to dispose of the
investments of the applicable Series or to determine fairly the
value of the net assets held with respect to such Series or
during any other period permitted by order of the Commission for
the protection of investors, such obligations may be suspended or
postponed by the Trustees.
The redemption price may in any case or cases be paid
wholly or partly in kind if the Trustees determine that such
payment is advisable in the interest of the remaining
Shareholders of the Series for which the Shares are being
redeemed. Subject to the foregoing, the fair value, selection
and quantity of securities or other property so paid or delivered
as all or part of the redemption price may be determined by or
under authority of the Trustees. In no case shall the Trust be
liable for any delay of any corporation or other Person in
transferring securities selected for delivery as all or part of
any payment in kind.
Section 3. Redemptions at the Option of the Trust.
The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof
as described in Section 1 of this Article VI: (i) if at such
time such Shareholder owns Shares of any Series having an
aggregate net asset value of less than an amount determined from
time to time by the Trustees prior to the acquisition of said
Shares; or (ii) to the extent that such Shareholder owns Shares
of a particular Series equal to or in excess of a percentage of
the outstanding Shares of that Series determined from time to
time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares equal to or in excess of a percentage,
determined from time to time by the Trustees, of the outstanding
Shares of the Trust or of any Series.
ARTICLE VI.
Compensation and Limitation of Liability of Trustees
Section 1. Compensation. The Trustees as such shall
be entitled to reasonable compensation from the Trust, and they
may fix the amount of such compensation. Nothing herein shall in
any way prevent the employment of any Trustee for advisory,
management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Indemnification and Limitation of
Liability. The Trustees shall not be responsible or liable in
any event for any neglect or wrong-doing of any officer, agent,
employee, Manager or Principal Underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any
other Trustee, and the Trust out of its assets shall indemnify
and hold harmless each and every Trustee from and against any and
all claims and demands whatsoever arising out of or related to
each Trustee's performance of his or her duties as a Trustee of
the Trust; provided that nothing herein contained shall
indemnify, hold harmless or protect any Trustee from or against
any liability to the Trust or any Shareholder to which he or she
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever issued,
executed or done by or on behalf of the Trust or the Trustees or
any of them in connection with the Trust shall be conclusively
deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee,
and such Trustees or Trustee shall not be personally liable
thereon.
Section 3. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety. The exercise by the Trustees of their powers
and discretions hereunder shall be binding upon everyone
interested. A Trustee shall be liable to the Trust and to any
Shareholder solely for his or her own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and shall not
be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect
to the meaning and operation of this Declaration of Trust, and
shall be under no liability for any act or omission in accordance
with such advice nor for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.
Section 4. Insurance. The Trustees shall be entitled
and empowered to the fullest extent permitted by law to purchase
with Trust assets insurance for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee
or officer in connection with any claim, action, suit or
proceeding in which he or she becomes involved by virtue of his
or her capacity or former capacity with the Trust, whether or not
the Trust would have the power to indemnify him or her against
such liability under the provisions of this Article.
ARTICLE VII.
Miscellaneous
Section 1. Liability of Third Persons Dealing with
Trustees. No Person dealing with the Trustees shall be bound to
make any inquiry concerning the validity of any transaction made
or to be made by the Trustees or to see to the application of any
payments made or property transferred to the Trust or upon its
order.
Section 2. Termination of Trust or Series. Unless
terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated at any time by
vote of a majority of the Shares of each Series entitled to vote,
voting separately by Series, or by the Trustees by written notice
to the Shareholders. Any Series may be terminated at any time by
vote of a majority of the Shares of that Series or by the
Trustees by written notice to the Shareholders of that Series.
Upon termination of the Trust (or any Series, as the
case may be), after paying or otherwise providing for all
charges, taxes, expenses and liabilities held, severally, with
respect to each Series (or the applicable Series, as the case may
be), whether due or accrued or anticipated as may be determined
by the Trustees, the Trust shall, in accordance with such
procedures as the Trustees consider appropriate, reduce the
remaining assets held, severally, with respect to each Series (or
the applicable Series, as the case may be), to distributable form
in cash or shares or other securities, or any combination
thereof, and distribute the proceeds held with respect to each
Series (or the applicable Series, as the case may be), to the
Shareholders of that Series, as a Series, ratably according to
the number of Shares of that Series held by the several
Shareholders on the date of termination.
Section 3. Merger and Consolidation. The Trustees may
cause (i) the Trust or one or more of its Series to the extent
consistent with applicable law to be merged into or consolidated
with another Trust or company, (ii) the Shares of the Trust or
any Series to be converted into beneficial interests in another
business trust (or series thereof) created pursuant to this
Section 3 of Article VIII, or (iii) the Shares to be exchanged
under or pursuant to any state or federal statute to the extent
permitted by law. Such merger or consolidation, Share conversion
or Share exchange must be authorized by vote of a majority of the
outstanding Shares of the Trust, as a whole, or any affected
Series, as may be applicable; provided that in all respects not
governed by statute or applicable law, the Trustees shall have
power to prescribe the procedure necessary or appropriate to
accomplish a sale of assets, merger or consolidation including
the power to create one or more separate business trusts to which
all or any part of the assets, liabilities, profits or losses of
the Trust may be transferred and to provide for the conversion of
Shares of the Trust or any Series into beneficial interests in
such separate business trust or trusts (or series thereof).
Section 4. Amendments. This Declaration of Trust may
be restated and/or amended at any time by an instrument in
writing signed by a majority of the then Trustees and, if
required, by approval of such amendment by Shareholders in
accordance with Article V, Section 3 hereof. Any such
restatement and/or amendment hereto shall be effective
immediately upon execution and approval. The Certificate of
Trust of the Trust may be restated and/or amended by a similar
procedure, and any such restatement and/or amendment shall be
effective immediately upon filing with the Office of the
Secretary of State of the State of Delaware or upon such future
date as may be stated therein.
Section 5. Filing of Copies, References, Headings.
The original or a copy of this instrument and of each restatement
and/or amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. Anyone dealing
with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such restatements and/or
amendments have been made and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were
the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such restatements
and/or amendments. In this instrument and in any such
restatements and/or amendment, references to this instrument, and
all expressions like "herein," "hereof" and "hereunder," shall be
deemed to refer to this instrument as amended or affected by any
such restatements and/or amendments. Headings are placed herein
for convenience of reference only and shall not be taken as a
part hereof or control or affect the meaning, construction or
effect of this instrument. Whenever the singular number is used
herein, the same shall include the plural; and the neuter,
masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Section 6. Applicable Law. This Agreement and
Declaration of Trust is created under and is to be governed by
and construed and administered according to the laws of the State
of Delaware and the Delaware Business Trust Act, as amended from
time to time (the "Act"). The Trust shall be a Delaware business
trust pursuant to such Act, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily
exercised by such a business trust.
Section 7. Provisions in Conflict with Law or
Regulations.
(a) The provisions of the Declaration of Trust are
severable, and if the Trustees shall determine, with the advice
of counsel, that any of such provisions is in conflict with the
1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to
have constituted a part of the Declaration of Trust; provided,
however, that such determination shall not affect any of the
remaining provisions of the Declaration of Trust or render
invalid or improper any action taken or omitted prior to such
determination.
(b) If any provision of the Declaration of Trust shall
be held invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such
provision in such jurisdiction and shall not in any manner affect
such provision in any other jurisdiction or any other provision
of the Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention
of the Trustees to create a business trust pursuant to the
Delaware Business Trust Act, as amended from time to time (the
"Act"), and thereby to create only the relationship of trustee
and beneficial owners within the meaning of such Act between the
Trustees and each Shareholder. It is not the intention of the
Trustees to create a general partnership, limited partnership,
joint stock association, corporation, bailment, or any form of
legal relationship other than a business trust pursuant to such
Act. Nothing in this Declaration of Trust shall be construed to
make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 9. Use of the name "Franklin". The name
"Franklin" and all rights to the use of the name "Franklin"
belongs to Franklin Resources, Inc. ("Franklin"), the sponsor of
the Trust. Franklin has consented to the use by the Trust of the
identifying word "Franklin" and has granted to the Trust a non-
exclusive license to use the name "Franklin" as part of the name
of the Trust and the name of any Series of Shares. In the event
Franklin or an affiliate of Franklin is not appointed as Manager
and/or Principal Underwriter or ceases to be the Manager and/or
Principal Underwriter of the Trust or of any Series using such
names, the non-exclusive license granted herein may be revoked by
Franklin and the Trust shall cease using the name "Franklin" as
part of its name or the name of any Series of Shares, unless
otherwise consented to by Franklin or any successor to its
interests in such names.
IN WITNESS WHEREOF, the Trustees named below do hereby
make and enter into this Declaration of Trust as of the ___ day
of ________________.
_________________________ __________________________
Frank H. Abbott, III Charles B. Johnson
1045 Sansome Street 777 Mariners Island Blvd.
San Francisco, CA 94111 San Mateo, CA 94404
_________________________ __________________________
Harris J. Ashton Rupert H. Johnson, Jr.
Metro Center, One Station Place 777 Mariners Island Blvd.
Stamford, CT 06904 San Mateo, CA 94404
_________________________ __________________________
S. Joseph Fortunato David W. Garbellano
Park Avenue at Morris County 111 New Montgomery St. #402
P.O. Box 1945 San Francisco, CA 94105
Morristown, NJ 07962-1945
_________________________ __________________________
Frank W. T. LaHaye Gordon S. Macklin
20833 Stevens Creek Blvd. 8212 Burning Tree Road
Suite 102 Bethesda, MD 20817
Cupertino, CA 95014
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS 777 Mariners
Island Boulevard, San Mateo, California 94404
BY-LAWS
OF
FRANKLIN TEMPLETON MONEY FUND TRUST
A Delaware Business Trust
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The Board of Trustees shall
fix and, from time to time, may change the location of the
principal executive office of the Trust at any place within or
outside the State of Delaware.
Section 2. OTHER OFFICES. The Board of Trustees may at any
time establish branch or subordinate offices at any place or
places where the Trust intends to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section I. PLACE OF MEETINGS. Meetings of shareholders
shall be held at any place within or outside the State of Delaware
designated by the Board of Trustees. In the absence of any such
designation, shareholders' meetings shall be held at the principal
executive office of the Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders
may be called at any time by the Board of Trustees or by the
Chairman of the Board or by the president.
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of
meetings of shareholders shall be sent or otherwise given in
accordance with Section 4 of this Article II not less than seven
(7) nor more than seventy-five (75) days before the date of the
meeting. The notice shall specify (i) the place, date and hour of
the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at which trustees are to be
elected also shall include the name of any nominee or nominees
whom at the time of the notice are intended to be presented for
election.
If action is proposed to be taken at any meeting for approval
of (i) a contract or transaction in which a trustee has a direct
or indirect financial interest, (ii) an amendment of the
Declaration of Trust, (iii) a reorganization of the Trust, or (iv)
a voluntary dissolution of the Trust, the notice shall also state
the general nature of that proposal.
Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
Notice of any meeting of shareholders shall be given either
personally or by first-class mail or telegraphic or other written
communication, charges prepaid, addressed to the shareholder at
the address of that shareholder appearing on the books of the
Trust or its transfer agent or given by the shareholder to the
Trust for the purpose of notice. If no such address appears on
the Trust's books or is given, notice shall be deemed to have been
given if sent to that shareholder by first-class mail or
telegraphic or other written communication to the Trust's
principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office
is located. Notice shall be deemed to have been given at the time
when delivered personally or deposited in the mail or sent by
telegram or other means of written communication.
If any notice addressed to a shareholder at the address of
that shareholder appearing on the books of the Trust is returned
to the Trust by the United States Postal Service marked to
indicate that the Postal Service is unable to deliver the notice
to the shareholder at that address, all future notices or reports
shall be deemed to have been duly given without further mailing if
these shall be available to the shareholder on written demand of
the shareholder at the principal executive office of the Trust for
a period of one year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any
notice of any shareholder's meeting shall be executed by the
secretary, assistant secretary or any transfer agent of the Trust
giving the notice and shall be filed and maintained in the minute
book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's
meeting, whether or not a quorum is present, may be adjourned from
time to time by the vote of the majority of the shares represented
at that meeting, either in person or by proxy.
When any meeting of shareholders is adjourned to another time
or place, notice need not be given of the adjourned meeting at
which the adjournment is taken, unless a new record date of the
adjourned meeting is fixed or unless the adjournment is for more
than sixty (60) days from the date set for the original meeting,
in which case the Board of Trustees shall set a new record date.
Notice of any such adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 3 and 4 of this Article
II. At any adjourned meeting, the Trust may transact any business
which might have been transacted at the original meeting.
Section 6. VOTING. The shareholders entitled to vote at any
meeting of shareholders shall be determined in accordance with the
provisions of the Declaration of Trust, as in effect at such time.
The shareholders' vote may be by voice vote or by ballot,
provided, however, that any election for trustees must be by
ballot if demanded by any shareholder before the voting has begun.
On any matter other than elections of trustees, any shareholder
may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the
proposal, but if the shareholder fails to specify the number of
shares which the shareholder is voting affirmatively, it will be
conclusively presumed that the shareholder's approving vote is
with respect to the total shares that the shareholder is entitled
to vote on such proposal.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT
SHAREHOLDERS. The transactions of the meeting of shareholders,
however called and noticed and wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice if
a quorum be present either in person or by proxy and if either
before or after the meeting, each person entitled to vote who was
not present in person or by proxy signs a written waiver of notice
or a consent to a holding of the meeting or an approval of the
minutes. The waiver of notice or consent need not specify either
the business to be transacted or the purpose of any meeting of
shareholders.
Attendance by a person at a meeting shall also constitute a
waiver of notice of that meeting, except when the person objects
at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened and except
that attendance at a meeting is not a waiver of any right to
object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the
beginning of the meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING. Any action which may be taken at any meeting of
shareholders may be taken without a meeting and without prior
notice if a consent in writing setting forth the action so taken
is signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all shares
entitled to vote on that action were present and voted. All such
consents shall be filed with the Secretary of the Trust and shall
be maintained in the Trust's records. Any shareholder giving a
written consent or the shareholder's proxy holders or a transferee
of the shares or a personal representative of the shareholder or
their respective proxy holders may revoke the consent by a writing
received by the Secretary of the Trust before written consents of
the number of shares required to authorize the proposed action
have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not
been solicited in writing and if the unanimous written consent of
all such shareholders shall not have been received, the Secretary
shall give prompt notice of the action approved by the
shareholders without a meeting. This notice shall be given in the
manner specified in Section 4 of this Article II. In the case of
approval of (i) contracts or transactions in which a trustee has a
direct or indirect financial interest, (ii) indemnification of
agents of the Trust, and (iii) a reorganization of the Trust, the
notice shall be given at least ten (10) days before the
consummation of any action authorized by that approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE; VOTING AND
GIVING CONSENTS. For purposes of determining the shareholders
entitled to notice of any meeting or to vote or entitled to give
consent to action without a meeting, the Board of Trustees may fix
in advance a record date which shall not be more than ninety (90)
days nor less than seven (7) days before the date of any such
meeting as provided in the Declaration of Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at the
close of business on the business day next preceding the day on
which notice is given or if notice is waived, at the close of
business on the business day next preceding the day on which the
meeting is held.
(b) The record date for determining shareholders entitled to
give consent to action in writing without a meeting, (i) when no
prior action by the Board of Trustees has been taken, shall be the
day on which the first written consent is given, or (ii) when
prior action of the Board of Trustees has been taken, shall be at
the close of business on the day on which the Board of Trustees
adopt the resolution relating to that action or the seventy-fifth
day before the date of such other action, whichever is later.
Section l0. PROXIES. Every person entitled to vote for
trustees or on any other matter shall have the right to do so
either in person or by one or more agents authorized by a written
proxy signed by the person and filed with the Secretary of the
Trust. A proxy shall be deemed signed if the shareholder's name
is placed on the proxy (whether by manual signature, typewriting,
telegraphic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which
does not state that it is irrevocable shall continue in full force
and effect unless (i) revoked by the person executing it before
the vote pursuant to that proxy by a writing delivered to the
Trust stating that the proxy is revoked or by a subsequent proxy
executed by or attendance at the meeting and voting in person by
the person executing that proxy; or (ii) written notice of the
death or incapacity of the maker of that proxy is received by the
Trust before the vote pursuant to that proxy is counted; provided
however, that no proxy shall be valid after the expiration of
eleven (11) months from the date of the proxy unless otherwise
provided in the proxy. The revocability of a proxy that states on
its face that it is irrevocable shall be governed by the
provisions of the General Corporation Law of the State of
California.
Section ll. INSPECTORS OF ELECTION. Before any meeting of
shareholders, the Board of Trustees may appoint any persons other
than nominees for office to act as inspectors of election at the
meeting or its adjournment. If no inspectors of election are so
appointed, the chairman of the meeting may and on the request of
any shareholder or a shareholder's proxy shall, appoint inspectors
of election at the meeting. The number of inspectors shall be
either one (1) or three (3). If inspectors are appointed at a
meeting on the request of one or more shareholders or proxies, the
holders of a majority of shares or their proxies present at the
meeting shall determine whether one (1) or three (3) inspectors
are to be appointed. If any person appointed as inspector fails
to appear or fails or refuses to act, the chairman of the meeting
may and on the request of any shareholder or a shareholder's
proxy, shall appoint a person to fill the vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the
existence of a quorum and the authenticity, validity and effect of
proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any
way arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the
election or vote with fairness to all shareholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of
the Declaration of Trust and these By-Laws relating to action
required to be approved by the shareholders or by the outstanding
shares, the business and affairs of the Trust shall be managed and
all powers shall be exercised by or under the direction of the
Board of Trustees.
Section 2. NUMBER AND QUALIFICATION OF TRUSTEES. The exact
number of trustees shall be set forth in the Agreement and
Declaration of Trust, until changed by a duly adopted amendment to
the Declaration of Trust.
Section 3. VACANCIES. Vacancies in the Board of Trustees
may be filled by a majority of the remaining trustees, though less
than a quorum, or by a sole remaining trustee, unless the Board of
Trustees calls a meeting of shareholders for the purposes of
electing trustees. In the event that at any time less than a
majority of the trustees holding office at that time were so
elected by the holders of the outstanding voting securities of the
Trust, the Board of Trustees shall forthwith cause to be held as
promptly as possible, and in any event within sixty (60) days, a
meeting of such holders for the purpose of electing trustees to
fill any existing vacancies in the Board of Trustees, unless such
period is extended by order of the United States Securities and
Exchange Commission.
Notwithstanding the above, whenever and for so long as the
Trust is a participant in or otherwise has in effect a Plan under
which the Trust may be deemed to bear expenses of distributing its
shares as that practice is described in Rule 12b-1 under the
Investment Company Act of 1940, then the selection and nomination
of the trustees who are not interested persons of the Trust (as
that term is defined in the Investment Company Act of 1940) shall
be, and is, committed to the discretion of such disinterested
trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All
meetings of the Board of Trustees may be held at any place within
or outside the State of Delaware that has been designated from
time to time by resolution of the Board. In the absence of such a
designation, regular meetings shall be held at the principal
executive office of the Trust. Any meeting, regular or special,
may be held by conference telephone or similar communication
equipment, so long as all trustees participating in the meeting
can hear one another and all such trustees shall be deemed to be
present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board
of Trustees shall be held without call at such time as shall from
time to time be fixed by the Board of Trustees. Such regular
meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board
of Trustees for any purpose or purposes may be called at any time
by the chairman of the board or the president or any vice
president or the secretary or any two (2) trustees.
Notice of the time and place of special meetings shall be
delivered personally or by telephone to each trustee or sent by
first-class mail or telegram, charges prepaid, addressed to each
trustee at that trustee's address as it is shown on the records of
the Trust. In case the notice is mailed, it shall be deposited in
the United States mail at least seven (7) days before the time of
the holding of the meeting. In case the notice is delivered
personally, by telephone, to the telegraph company, or by express
mail or similar service, it shall be given at least forty-eight
(48) hours before the time of the holding of the meeting. Any
oral notice given personally or by telephone may be communicated
either to the trustee or to a person at the office of the trustee
who the person giving the notice has reason to believe will
promptly communicate it to the trustee. The notice need not
specify the purpose of the meeting or the place if the meeting is
to be held at the principal executive office of the Trust.
Section 7. QUORUM. A majority of the authorized number of
trustees shall constitute a quorum for the transaction of
business, except to adjourn as provided in Section l0 of this
Article III. Every act or decision done or made by a majority of
the trustees present at a meeting duly held at which a quorum is
present shall be regarded as the act of the Board of Trustees,
subject to the provisions of the Declaration of Trust. A meeting
at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of trustees if any action
taken is approved by a least a majority of the required quorum for
that meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not
be given to any trustee who either before or after the meeting
signs a written waiver of notice, a consent to holding the
meeting, or an approval of the minutes. The waiver of notice or
consent need not specify the purpose of the meeting. All such
waivers, consents, and approvals shall be filed with the records
of the Trust or made a part of the minutes of the meeting. Notice
of a meeting shall also be deemed given to any trustee who attends
the meeting without protesting before or at its commencement the
lack of notice to that trustee.
Section 9. ADJOURNMENT. A majority of the trustees present,
whether or not constituting a quorum, may adjourn any meeting to
another time and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and
place of holding an adjourned meeting need not be given unless the
meeting is adjourned for more than forty-eight (48) hours, in
which case notice of the time and place shall be given before the
time of the adjourned meeting in the manner specified in Section 7
of this Article III to the trustees who were present at the time
of the adjournment.
Section 11. ACTION WITHOUT A MEETING. Any action required
or permitted to be taken by the Board of Trustees may be taken
without a meeting if a majority of the members of the Board of
Trustees shall individually or collectively consent in writing to
that action. Such action by written consent shall have the same
force and effect as a majority vote of the Board of Trustees. Such
written consent or consents shall be filed with the minutes of the
proceedings of the Board of Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and
members of committees may receive such compensation, if any, for
their services and such reimbursement of expenses as may be fixed
or determined by resolution of the Board of Trustees. This
Section 12 shall not be construed to preclude any trustee from
serving the Trust in any other capacity as an officer, agent,
employee, or otherwise and receiving compensation for those
services.
Section l3. DELEGATION OF POWER TO OTHER TRUSTEES. Any
Trustee may, by power of attorney, delegate his power for a period
not exceeding six (6) months at any one time to any other Trustee
or Trustees; provided that in no case shall fewer than two (2)
Trustees personally exercise the powers granted to the Trustees
under this Declaration of Trust except as otherwise expressly
provided herein or by resolution of the Board of Trustees.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees
may by resolution adopted by a majority of the authorized number
of trustees designate one or more committees, each consisting of
two (2) or more trustees, to serve at the pleasure of the Board.
The Board may designate one or more trustees as alternate members
of any committee who may replace any absent member at any meeting
of the committee. Any committee to the extent provided in the
resolution of the Board, shall have the authority of the Board,
except with respect to:
(a) the approval of any action which under applicable law
also requires shareholders' approval or approval of the
outstanding shares, or requires approval by a majority of the
entire Board or certain members of said Board;
(b) the filling of vacancies on the Board of Trustees or in
any committee;
(c) the fixing of compensation of the trustees for serving
on the Board of Trustees or on any committee;
(d) the amendment or repeal of the Declaration of Trust or
of the By-Laws or the adoption of new By-Laws;
(e) the amendment or repeal of any resolution of the Board
of Trustees which by its express terms is not so amendable or
repealable;
(f) a distribution to the shareholders of the Trust, except
at a rate or in a periodic amount or within a designated range
determined by the Board of Trustees; or
(g) the appointment of any other committees of the Board of
Trustees or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and
action of committees shall be governed by and held and taken in
accordance with the provisions of Article III of these By-Laws,
with such changes in the context thereof as are necessary to
substitute the committee and its members for the Board of Trustees
and its members, except that the time of regular meetings of
committees may be determined either by resolution of the Board of
Trustees or by resolution of the committee. Special meetings of
committees may also be called by resolution of the Board of
Trustees, and notice of special meetings of committees shall also
be given to all alternate members who shall have the right to
attend all meetings of the committee. The Board of Trustees may
adopt rules for the government of any committee not inconsistent
with the provisions of these By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a
president, a secretary, and a treasurer. The Trust may also have,
at the discretion of the Board of Trustees, a chairman of the
board, one or more vice presidents, one or more assistant
secretaries, one or more assistant treasurers, and such other
officers as may be appointed in accordance with the provisions of
Section 3 of this Article V. Any number of offices may be held by
the same person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust,
except such officers as may appointed in accordance with the
provisions of Section 3 or Section 5 of this Article V, shall be
chosen by the Board of Trustees, and each shall serve at the
pleasure of the Board of Trustees, subject to the rights, if any,
of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may
appoint and may empower the president to appoint such other
officers as the business of the Trust may require, each of whom
shall hold office for such period, have such authority and perform
such duties as are provided in these By-Laws or as the Board of
Trustees may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to
the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without
cause, by the Board of Trustees at any regular or special meeting
of the Board of Trustees or except in the case of an officer upon
whom such power of removal may be conferred by the Board of
Trustees.
Any officer may resign at any time by giving written notice
to the Trust. Any resignation shall take effect at the date of
the receipt of that notice or at any later time specified in that
notice; and unless otherwise specified in that notice, the
acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if
any, of the Trust under any contract to which the officer is a
party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office
because of death, resignation, removal, disqualification or other
cause shall be filled in the manner prescribed in these By-Laws
for regular appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The chairman of the
board, if such an officer is elected, shall if present preside at
meetings of the Board of Trustees and exercise and perform such
other powers and duties as may be from time to time assigned to
him by the Board of Trustees or prescribed by the By-Laws.
Section 7. PRESIDENT. Subject to such supervisory powers,
if any, as may be given by the Board of Trustees to the chairman
of the board, if there be such an officer, the president shall be
the chief executive officer of the Trust and shall, subject to the
control of the Board of Trustees, have general supervision,
direction and control of the business and the officers of the
Trust. He shall preside at all meetings of the shareholders and
in the absence of the chairman of the board or if there be none,
at all meetings of the Board of Trustees. He shall have the
general powers and duties of management usually vested in the
office of president of a corporation and shall have such other
powers and duties as may be prescribed by the Board of Trustees or
these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of
the president, the vice presidents, if any, in order of their rank
as fixed by the Board of Trustees or if not ranked, a vice
president designated by the Board of Trustees, shall perform all
the duties of the president and when so acting shall have all
powers of and be subject to all the restrictions upon the
president. The vice presidents shall have such other powers and
perform such other duties as from time to time may be prescribed
for them respectively by the Board of Trustees or by these By-Laws
and the president or the chairman of the board.
Section 9. SECRETARY. The secretary shall keep or cause to
be kept at the principal executive office of the Trust or such
other place as the Board of Trustees may direct a book of minutes
of all meetings and actions of trustees, committees of trustees
and shareholders with the time and place of holding, whether
regular or special, and if special, how authorized, the notice
given, the names of those present at trustees' meetings or
committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings.
The secretary shall keep or cause to be kept at the principal
executive office of the Trust or at the office of the Trust's
transfer agent or registrar, as determined by resolution of the
Board of Trustees, a share register or a duplicate share register
showing the names of all shareholders and their addresses, the
number and classes of shares held by each, the number and date of
certificates issued for the same and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give or cause to be given notice of all
meetings of the shareholders and of the Board of Trustees required
by these By-Laws or by applicable law to be given and shall have
such other powers and perform such other duties as may be
prescribed by the Board of Trustees or by these By-Laws.
Section 10. TREASURER. The treasurer shall be the chief
financial officer of the Trust and shall keep and maintain or
cause to be kept and maintained adequate and correct books and
records of accounts of the properties and business transactions of
the Trust, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, retained earnings
and shares. The books of account shall at all reasonable times be
open to inspection by any trustee.
The treasurer shall deposit all monies and other valuables in
the name and to the credit of the Trust with such depositaries as
may be designated by the Board of Trustees. He shall disburse the
funds of the Trust as may be ordered by the Board of Trustees,
shall render to the president and trustees, whenever they request
it, an account of all of his transactions as chief financial
officer and of the financial condition of the Trust and shall have
other powers and perform such other duties as may be prescribed by
the Board of Trustees or these By-Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the
purpose of this Article, "agent" means any person who is or was a
trustee, officer, employee or other agent of this Trust or is or
was serving at the request of this Trust as a trustee, director,
officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise
or was a trustee, director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor of another
enterprise at the request of such predecessor entity; "proceeding"
means any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative; and
"expenses" includes without limitation attorney's fees and any
expenses of establishing a right to indemnification under this
Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall
indemnify any person who was or is a party or is threatened to be
made a party to any proceeding (other than an action by or in the
right of this Trust) by reason of the fact that such person is or
was an agent of this Trust, against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in
connection with such proceeding if that person acted in good faith
and in a manner that person reasonably believed to be in the best
interests of this Trust and in the case of a criminal proceeding,
had no reasonable cause to believe the conduct of that person was
unlawful. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner which the person
reasonably believed to be in the best interests of this Trust or
that the person had reasonable cause to believe that the person's
conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action by or in the
right of this Trust to procure a judgment in its favor by reason
of the fact that the person is or was an agent of this Trust,
against expenses actually and reasonably incurred by that person
in connection with the defense or settlement of that action if
that person acted in good faith, in a manner that person believed
to be in the best interests of this Trust and with such care,
including reasonable inquiry, as an ordinarily prudent person in a
like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding
any provision to the contrary contained herein, there shall be no
right to indemnification for any liability arising by reason of
willful misfeasance, bad faith, gross negligence, or the reckless
disregard of the duties involved in the conduct of the agent's
office with this Trust.
No indemnification shall be made under Sections 2 or 3 of
this Article:
(a) In respect of any claim, issue or matter as to which
that person shall have been adjudged to be liable in the
performance of that person's duty to this Trust, unless and only
to the extent that the court in which that action was brought
shall determine upon application that in view of all the
circumstances of the case, that person was not liable by reason of
the disabling conduct set forth in the preceding paragraph and is
fairly and reasonably entitled to indemnity for the expenses which
the court shall determine; or
(b) In respect of any claim, issue, or matter as to which
that person shall have been adjudged to be liable on the basis
that personal benefit was improperly received by him, whether or
not the benefit resulted from an action taken in the person's
official capacity; or
(c) Of amounts paid in settling or otherwise disposing of a
threatened or pending action, with or without court approval, or
of expenses incurred in defending a threatened or pending action
which is settled or otherwise disposed of without court approval,
unless the required approval set forth in Section 6 of this
Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that
an agent of this Trust has been successful on the merits in
defense of any proceeding referred to in Sections 2 or 3 of this
Article or in defense of any claim, issue or matter therein,
before the court or other body before whom the proceeding was
brought, the agent shall be indemnified against expenses actually
and reasonably incurred by the agent in connection therewith,
provided that the Board of Trustees, including a majority who are
disinterested, non-party trustees, also determines that based upon
a review of the facts, the agent was not liable by reason of the
disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section
5 of this Article, any indemnification under this Article shall be
made by this Trust only if authorized in the specific case on a
determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of
conduct set forth in Sections 2 or 3 of this Article and is not
prohibited from indemnification because of the disabling conduct
set forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of trustees who
are not parties to the proceeding and are not interested persons
of the Trust (as defined in the Investment Company Act of 1940);
or
(b) A written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in
defending any proceeding may be advanced by this Trust before the
final disposition of the proceeding on receipt of an undertaking
by or on behalf of the agent to repay the amount of the advance
unless it shall be determined ultimately that the agent is
entitled to be indemnified as authorized in this Article, provided
the agent provides a security for his undertaking, or a majority
of a quorum of the disinterested, non-party trustees, or an
independent legal counsel in a written opinion, determine that
based on a review of readily available facts, there is reason to
believe that said agent ultimately will be found entitled to
indemnification.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in
this Article shall affect any right to indemnification to which
persons other than trustees and officers of this Trust or any
subsidiary hereof may be entitled by contract or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall
be made under this Article, except as provided in Sections 5 or 6
in any circumstances where it appears:
(a) That it would be inconsistent with a provision of the
Agreement and Declaration of Trust, a resolution of the
shareholders, or an agreement in effect at the time of accrual of
the alleged cause of action asserted in the proceeding in which
the expenses were incurred or other amounts were paid which
prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition
expressly imposed by a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a
determination by the Board of Trustees of this Trust to purchase
such insurance, this Trust shall purchase and maintain insurance
on behalf of any agent of this Trust against any liability
asserted against or incurred by the agent in such capacity or
arising out of the agent's status as such, but only to the extent
that this Trust would have the power to indemnify the agent
against that liability under the provisions of this Article.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This
Article does not apply to any proceeding against any trustee,
investment manager or other fiduciary of an employee benefit plan
in that person' s capacity as such, even though that person may
also be an agent of this Trust as defined in Section 1 of this
Article. Nothing contained in this Article shall limit any right
to indemnification to which such a trustee, investment manager, or
other fiduciary may be entitled by contract or otherwise which
shall be enforceable to the extent permitted by applicable law
other than this Article.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER.
This Trust shall keep at its principal executive office or at the
office of its transfer agent or registrar, if either be appointed
and as determined by resolution of the Board of Trustees, a record
of its shareholders, giving the names and addresses of all
shareholders and the number and series of shares held by each
shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust
shall keep at its principal executive office the original or a
copy of these By-Laws as amended to date, which shall be open to
inspection by the shareholders at all reasonable times during
office hours.
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The
accounting books and records and minutes of proceedings of the
shareholders and the Board of Trustees and any committee or
committees of the Board of Trustees shall be kept at such place or
places designated by the Board of Trustees or in the absence of
such designation, at the principal executive office of the Trust.
The minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other
form capable of being converted into written form. The minutes
and accounting books and records shall be open to inspection upon
the written demand of any shareholder or holder of a voting trust
certificate at any reasonable time during usual business hours for
a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The
inspection may be made in person or by an agent or attorney and
shall include the right to copy and make extracts.
Section 4. INSPECTION BY TRUSTEES. Every trustee shall have
the absolute right at any reasonable time to inspect all books,
records, and documents of every kind and the physical properties
of the Trust. This inspection by a trustee may be made in person
or by an agent or attorney and the right of inspection includes
the right to copy and make extracts of documents.
Section 5. FINANCIAL STATEMENTS. A copy of any financial
statements and any income statement of the Trust for each
quarterly period of each fiscal year and accompanying balance
sheet of the Trust as of the end of each such period that has been
prepared by the Trust shall be kept on file in the principal
executive office of the Trust for at least twelve (12) months and
each such statement shall be exhibited at all reasonable times to
any shareholder demanding an examination of any such statement or
a copy shall be mailed to any such shareholder.
The quarterly income statements and balance sheets referred
to in this section shall be accompanied by the report, if any, of
any independent accountants engaged by the Trust or the
certificate of an authorized officer of the Trust that the
financial statements were prepared without audit from the books
and records of the Trust.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All
checks, drafts, or other orders for payment of money, notes or
other evidences of indebtedness issued in the name of or payable
to the Trust shall be signed or endorsed by such person or persons
and in such manner as from time to time shall be determined by
resolution of the Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The
Board of Trustees, except as otherwise provided in these By-Laws,
may authorize any officer or officers, agent or agents, to enter
into any contract or execute any instrument in the name of and on
behalf of the Trust and this authority may be general or confined
to specific instances; and unless so authorized or ratified by the
Board of Trustees or within the agency power of an officer, no
officer, agent, or employee shall have any power or authority to
bind the Trust by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
Section 3. CERTIFICATES FOR SHARES. A certificate or
certificates for shares of beneficial interest in any series of
the Trust may be issued to a shareholder upon his request when
such shares are fully paid. All certificates shall be signed in
the name of the Trust by the chairman of the board or the
president or vice president and by the treasurer or an assistant
treasurer or the secretary or any assistant secretary, certifying
the number of shares and the series of shares owned by the
shareholders. Any or all of the signatures on the certificate may
be facsimile. In case any officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed on a
certificate shall have ceased to be that officer, transfer agent,
or registrar before that certificate is issued, it may be issued
by the Trust with the same effect as if that person were an
officer, transfer agent or registrar at the date of issue.
Notwithstanding the foregoing, the Trust may adopt and use a
system of issuance, recordation and transfer of its shares by
electronic or other means.
Section 4. LOST CERTIFICATES. Except as provided in this
Section 4, no new certificates for shares shall be issued to
replace an old certificate unless the latter is surrendered to the
Trust and cancelled at the same time. The Board of Trustees may
in case any share certificate or certificate for any other
security is lost, stolen, or destroyed, authorize the issuance of
a replacement certificate on such terms and conditions as the
Board of Trustees may require, including a provision for
indemnification of the Trust secured by a bond or other adequate
security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on
account of the alleged loss, theft, or destruction of the
certificate or the issuance of the replacement certificate.
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD
BY TRUST. The chairman of the board, the president or any vice
president or any other person authorized by resolution of the
Board of Trustees or by any of the foregoing designated officers,
is authorized to vote or represent on behalf of the Trust any and
all shares of any corporation, partnership, trusts, or other
entities, foreign or domestic, standing in the name of the Trust.
The authority granted may be exercised in person or by a proxy
duly executed by such designated person.
Section 6. FISCAL YEAR. The fiscal year of the Trust shall
be fixed and refixed or changed from time to time by resolution of
the Trustees. The fiscal year of the Trust shall be the taxable
year of each Series of the Trust.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY SHAREHOLDERS. These By-Laws may be
amended or repealed by the affirmative vote or written consent of
a majority of the outstanding shares entitled to vote, except as
otherwise provided by applicable law or by the Declaration of
Trust or these By-Laws.
Section 2. AMENDMENT BY TRUSTEES. Subject to the right of
shareholders as provided in Section 1 of this Article to adopt,
amend or repeal By-Laws, and except as otherwise provided by law
or by the Declaration of Trust, these By-Laws may be adopted,
amended, or repealed by the Board of Trustees.
FRANKLIN TEMPLETON MONEY FUND TRUST
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made between FRANKLIN
TEMPLETON MONEY FUND TRUST, on behalf of Franklin Templeton Money
Fund II and any future series of the trust (hereinafter
collectively referred to as the "Fund"), and FRANKLIN ADVISERS,
INC., a California Corporation, hereinafter called the
"Administrator."
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of
1940 for the purpose of investing and reinvesting its assets in
securities, as set forth in its Articles of Incorporation, its By-
Laws and its Registration Statements under the Investment Company
Act of 1940 and the Securities Act of 1933, all as heretofore
amended and supplemented;
WHEREAS, the Fund desires to avail itself of the services,
assistance and facilities of an administrator and to have an
administrator perform various administrative and other services
for it; and,
WHEREAS, the Administrator is engaged in the business of
rendering administrative services to investment companies, and
desires to provide these services to the Fund;
NOW THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Administrator. The Fund hereby
employs the Administrator to administer its affairs, subject
to the direction of the Board of Directors and the officers
of the Fund, for the period and on the terms hereinafter set
forth. The Administrator hereby accepts such employment and
agrees during such period to render the services and to
assume the obligations herein set forth for the compensation
herein provided. The Administrator shall for all purposes
herein be deemed to be an independent contractor and shall,
except as expressly provided or authorized (whether herein
or otherwise), have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
2. Obligations of and Services to be Provided by the
Administrator. The Administrator undertakes to provide the
services hereinafter set forth and to assume the following
obligations:
A. Office Space, Furnishings, Facilities,
Equipment, and Personnel. The Administrator shall
furnish to the Fund adequate (i) office space, which
may be space within the offices of the Administrator or
in such other place as may be agreed upon from time to
time, and (ii) office furnishings, facilities and
equipment as may be reasonably required for managing
the affairs and conducting the business of the Fund,
including complying with the securities reporting
requirements of the United States and the various
states in which the Fund does business, conducting
correspondence and other communications with the
shareholders of the Fund, maintaining all internal
bookkeeping, accounting, auditing services and records
in connection with the Fund's investment and business
activities, and computing its net asset value. The
Administrator shall employ or provide and compensate
the executive, secretarial and clerical personnel
necessary to provide such services. The Administrator
shall also compensate all officers and employees of the
Fund who are officers or employees of the
Administrator.
B. Provision of Information Necessary for
Preparation of Securities Registration Statements,
Amendments and Other Materials. The Administrator, its
officers and employees will make available and provide
accounting and statistical information required by the
Fund or its Underwriter in the preparation of
registration statements, reports and other documents
required by Federal and state securities laws and with
such information as the Fund or its Underwriter may
reasonably request for use in the preparation of such
documents or of other materials necessary or helpful
for the underwriting and distribution of the Fund's
shares.
C. Other Obligations and Services. The
Administrator shall make available its officers and
employees to the Board of Directors and officers of the
Fund for consultation and discussions regarding the
administration of the Fund and its activities.
3. Expenses of the Fund. It is understood that the Fund
will pay all of its own expenses other than those expressly
assumed by the Administrator herein, which expenses payable
by the Fund shall include:
A. Fees to the Administrator as provided herein;
B. Expenses of all audits by independent public
accountants;
C. Expenses of transfer agent, registrar,
custodian, dividend disbursing agent and
shareholder record-keeping services;
D. Expenses, if any, of obtaining
quotations for calculating the value of the Fund's
net assets;
E. Salaries and other compensation of any
of its executive officers who are not officers,
directors, stockholders or employees of the
Administrator;
F. Taxes levied against the Fund;
G. Costs, including the interest expense, of
borrowing money;
H. Costs incident to meetings of the Board
of Directors, reports to the Fund's shareholders,
the filing of reports with regulatory bodies and
the maintenance of the Fund's legal existence;
I. Legal fees, including the legal fees
related to the registration and continued
qualification of the Fund's shares for sale;
J. Directors' fees and expenses to
directors who are not directors, officers,
employees or stockholders of the Administrator or
any of its affiliates;
K. Costs and expense of registering and
maintaining the registration of the Fund and its
shares under federal and any applicable state
laws, including the printing and mailing of
prospectuses to its shareholders;
L. Trade association dues; and
M. The Fund's pro rata portion of the
fidelity bond insurance premium and directors and
officers errors and omissions insurance premium.
4. Compensation of the Administrator. The Fund shall pay
a monthly administration fee in cash to the Administrator
based upon a percentage of the value of the Fund's net
assets, calculated as set forth below, on the first business
day of each month in each year as compensation for the
services rendered and obligations assumed by the
Administrator during the preceding month. The initial
administration fee under this Agreement shall be payable on
the first business day of the first month following the
effective date of this Agreement, and shall be reduced by
the amount of any advance payments made by the Fund relating
to the previous month.
A. For purposes of calculating such fee, the
value of the net assets of the Fund shall be the
average daily net assets during the month for which the
payment is being made, determined in the same manner as
the Fund uses to compute the value of its net assets in
connection with the determination of the daily net
asset value of its shares, all as set forth more fully
in the Fund's current prospectus. The annual rate of
the administration fee payable by the Fund shall be
91/200 of 1% for the first $100 million of its net
assets; and 33/100 of 1% of its net assets over $100
million up to and including $250 million; and 7/25 of
1% of its net assets in excess of $250 million.
B. If this Agreement is terminated prior to the
end of any month, the accrued administration fee for
the Fund shall be paid to the date of termination.
5. Activities of the Administrator. The services of the
Administrator to the Fund hereunder are not to be deemed
exclusive, and the Administrator and any of its affiliates
shall be free to render similar services to others. Subject
to and in accordance with the Articles of Incorporation and
By-Laws of the Fund and to Section 10(a) of the Investment
Company Act of 1940, it is understood that directors,
officers, agents and shareholders of the Fund are or may be
interested in the Administrator or its affiliates as
trustees, directors, officers, agents or stockholders and
that trustees, directors, officers, agents or stockholders
of the Administrator or its affiliates are or may be
interested in the Fund as directors, officers, agents,
shareholders or otherwise; and that the effect of any such
interests shall be governed by said Articles of
Incorporation, the By-Laws and the Investment Company Act of
1940.
6. Liabilities of the Administrator.
A. In the absence of willful misfeasance, bad
faith, gross negligence, or reckless disregard of
obligation or duties hereunder on the part of the
Administrator, the Administrator shall not be subject
to liability to the Fund or to any shareholder of the
Fund for any act or omission in the course of, or
connected with, rendering services hereunder.
B. Notwithstanding the foregoing, the
Administrator agrees to reimburse the Fund for any and
all costs, expenses, and counsel and directors' fees
reasonably incurred by the Fund in the preparation,
printing and distribution of proxy statements,
amendments to its Registration Statement, holdings of
meetings of its shareholders or directors, the conduct
of factual investigations, any legal or administrative
proceedings (including any applications for exemptions
or determinations by the Securities and Exchange
Commission) which the Fund incurs as the result of
action or inaction of the Administrator or any of its
affiliates or any of their officers, directors,
employees or shareholders where the action or inaction
necessitating such expenditures (i) is directly or
indirectly related to any transactions or proposed
transaction in the shares or control of the
Administrator or its affiliates (or litigation related
to any pending or proposed or future transaction in
such shares or control); or, (ii) is within the control
of the Administrator or any of its affiliates or any of
their officers, directors, employees or shareholders.
The Administrator shall not be obligated, pursuant to
the provisions of this Subsection 6(B), to reimburse
the Fund for any expenditures related to the
institution of an administrative proceeding or civil
litigation by the Fund or a shareholder seeking to
recover all or a portion of the proceeds derived by any
shareholder of the Administrator or any of its
affiliates from the sale of shares of the
Administrator, or similar matters. So long as this
Agreement is in effect, the Administrator shall pay to
the Fund the amount due for expenses subject to
Subsection 6(B) of this Agreement within 30 days after
a bill or statement has been received by the
Administrator therefor. This provision shall not be
deemed to be a waiver of any claim the Fund may have or
may assert against the Administrator or others for
costs, expenses or damages heretofore incurred by the
Fund or for costs, expenses or damages the Fund may
hereafter incur which are not reimbursable to it
hereunder.
C. No provision of this Agreement shall be
construed to protect any director or officer of the
Fund, or director or officer of the Administrator, from
liability in violation of Sections 17(h) and (i) of the
Investment Company Act of 1940.
7. Duration and Termination.
A. This Agreement shall become effective on the
date written below and shall continue in effect until
terminated by the Fund or the Administrator on 60 days
written notice to the other.
B. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed
post-paid, to the other party at any office of such
party.
8. Severability. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be
affected thereby.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of
California.
10. Limitation of Liability. The Administrator
acknowledges that it has received notice of and accepts the
limitations of the Fund's liability as set forth in its
Articles of Incorporation. The Administrator agrees that
the Fund's obligations hereunder shall be limited to the
assets of the Fund, and that the Administrator shall not
seek satisfaction of any such obligation from any
shareholders of the Fund nor from any director, officer,
employee or agent of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and effective on the _____ day of
____________, 1995.
FRANKLIN TEMPLETON MONEY FUND TRUST
By
FRANKLIN ADVISERS, INC.
By
Franklin Templeton Money Fund Trust
777 Mariners Island Blvd.
San Mateo, California 94404
Franklin/Templeton Distributors, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404
Re: Distribution Agreement
Gentlemen:
We are a Delaware business trust operating as an open-end
management investment company. As such, our company, Franklin
Templeton Money Fund Trust (referred to herein as the "Trust"),
is registered under the Investment Company Act of 1940 (the "1940
Act"), and its shares are registered under the Securities Act of
1933 (the "1933 Act"). We desire to issue one or more classes of
our authorized but unissued shares of beneficial interest (the
"Shares") to authorized persons in accordance with applicable
Federal and State securities laws. Shares will be made available
for each Fund currently or hereafter organized as a separate
series of the Trust (referred to herein as a "Fund" or
collectively as the "Funds").
You have informed us that your company is registered as a broker-
dealer under the provisions of the Securities Exchange Act of
1934 and that your company is a member of the National
Association of Securities Dealers, Inc. You have indicated your
desire to act as the exclusive selling agent and distributor for
the Shares. We have been authorized to execute and deliver this
Distribution Agreement ("Agreement") to you by a resolution of
our Board of Trustees passed at a meeting at which a majority of
our Trustees, including a majority who are not otherwise
interested persons of the Trust and who are not interested
persons of our investment adviser, its related organizations or
with you or your related organizations, were present and voted in
favor of the said resolution approving this Agreement.
1. Appointment of Underwriter. Upon the execution of this
Agreement and in consideration of the agreements on your part
herein expressed and upon the terms and conditions set forth
herein, we hereby appoint you as the exclusive sales agent for
our Shares and agree that we will deliver such Shares as you may
sell. You agree to use your best efforts to promote the sale of
Shares, but are not obligated to sell any specific number of
Shares.
However, the Trust and each Fund retain the right to make
direct sales of its Shares without sales charges consistent with
the terms of the then current prospectus and applicable law, and
to engage in other legally authorized transactions in its Shares
which do not involve the sale of Shares to the general public.
Such other transactions may include, without limitation,
transactions between the Trust or any Fund and its shareholders
only, transactions involving the reorganization of the Trust or
any Fund, and transactions involving the merger or combination of
the Trust or any Fund with another corporation or trust.
2. Independent Contractor. You will undertake and
discharge your obligations hereunder as an independent contractor
and shall have no authority or power to obligate or bind us by
your actions, conduct or contracts except that you are authorized
to promote the sale of Shares. You may appoint sub-agents or
distribute through dealers or otherwise as you may determine from
time to time, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale
or repurchase on our behalf or otherwise act as our agent for any
purpose.
3. Offering Price. Each class of each Fund's Shares shall
be offered for sale at a price equivalent to the net asset value
per share of that class plus any applicable percentage of the
public offering price as sales commission or as otherwise set
forth in our then current prospectus. On each business day on
which the New York Stock Exchange is open for business, we will
furnish you with the net asset value of the Shares of each class
which shall be determined in accordance with our then effective
prospectus. All Shares will be sold in the manner set forth in
our then effective prospectus and statement of additional
information, and in compliance with applicable law.
4. Compensation.
A. Sales Commission. You shall be entitled to charge
a sales commission on the sale or redemption, as appropriate, of
each class of each Fund's Shares in the amount of any initial or
deferred sales charge as set forth in our then effective
prospectus. You may allow any sub-agents or dealers such
commissions or discounts from and not exceeding the total sales
commission as you shall deem advisable, so long as any such
commissions or discounts are set forth in our current prospectus
to the extent required by the applicable Federal and State
securities laws. You may also make payments to sub-agents or
dealers from your own resources, subject to the following
conditions: (a) any such payments shall not create any
obligation for or recourse against the Trust or any Fund, and (b)
the terms and conditions of any such payments are consistent with
our prospectus and applicable Federal and State securities laws
and disclosed in our prospectus or statement of additional
information to the extent such laws may require.
B. Distribution Plans. You shall also be entitled to
compensation for your services as provided in any Distribution
Plan adopted as to any class of any Fund's Shares pursuant to
Rule 12b-1 under the 1940 Act.
5. Terms and Conditions of Sales. Each Fund's Shares
shall be offered for sale only in those jurisdictions where they
have been properly registered or are exempt from registration,
and only to those groups of people which the Board of Trustees
may from time to time determine to be eligible to purchase such
shares.
6. Orders and Payment for Shares. Orders for Shares shall
be directed to the Trust's shareholder services agent, for
acceptance on behalf of the Trust. At or prior to the time of
delivery of any of our Shares you will pay or cause to be paid to
the principal custodian of the Trust's assets, for our account,
an amount in cash equal to the net asset value of such Shares.
Sales of Shares shall be deemed to be made when and where
accepted by the Trust's shareholder services agent. The Trust's
custodian and shareholder services agent shall be identified in
its prospectus.
7. Purchases for Your Own Account. You shall not purchase
our Shares for your own account for purposes of resale to the
public, but you may purchase Shares for your own investment
account upon your written assurance that the purchase is for
investment purposes and that the Shares will not be resold except
through redemption by us.
8. Sale of Shares to Affiliates. You may sell our Shares
at net asset value to certain of your and our affiliated persons
pursuant to the applicable provisions of the Federal Securities
Statutes and Rules or Regulations thereunder (the "Rules and
Regulations"), including Rule 22d-1 under the 1940 Act, as
amended from time to time.
9. Allocation of Expenses. We will pay the expenses:
(a) Of the preparation of the audited and
certified financial statements of our company to
be included in any Post-Effective Amendments
("Amendments") to our Registration Statement under
the 1933 Act or 1940 Act, including the prospectus
and statement of additional information included
therein;
(b) Of the preparation, including legal
fees, and printing of all Amendments or
supplements filed with the Securities and Exchange
Commission, including the copies of the
prospectuses included in the Amendments and the
first 10 copies of the definitive prospectuses or
supplements thereto, other than those necessitated
by your (including your "Parent's") activities or
Rules and Regulations related to your activities
where such Amendments or supplements result in
expenses which we would not otherwise have
incurred;
(c) Of the preparation, printing and
distribution of any reports or communications
which we send to our existing shareholders; and
(d) Of filing and other fees to Federal and
State securities regulatory authorities necessary
to continue offering our Shares.
You will pay the expenses:
(a) Of printing the copies of the
prospectuses and any supplements thereto and
statements of additional information which are
necessary to continue to offer our Shares;
(b) Of the preparation, excluding legal
fees, and printing of all Amendments and
supplements to our prospectuses and statements of
additional information if the Amendment or
supplement arises from your (including your
"Parent's") activities or Rules and Regulations
related to your activities and those expenses
would not otherwise have been incurred by us;
(c) Of printing additional copies, for use
by you as sales literature, of reports or other
communications which we have prepared for
distribution to our existing shareholders; and
(d) Incurred by you in advertising,
promoting and selling our Shares.
10. Furnishing of Information. We will furnish to you such
information with respect to each Fund and its Shares, in such
form and signed by such of our officers as you may reasonably
request, and we warrant that the statements therein contained,
when so signed, will be true and correct. We will also furnish
you with such information and will take such action as you may
reasonably request in order to qualify our Shares for sale to the
public under the Blue Sky Laws of jurisdictions in which you may
wish to offer them. We will furnish you with annual audited
financial statements of our books and accounts certified by
independent public accountants, with semi-annual financial
statements prepared by us, with registration statements and, from
time to time, with such additional information regarding our
financial condition as you may reasonably request.
11. Conduct of Business. Other than our currently
effective prospectus, you will not issue any sales material or
statements except literature or advertising which conforms to the
requirements of Federal and State securities laws and regulations
and which have been filed, where necessary, with the appropriate
regulatory authorities. You will furnish us with copies of all
such materials prior to their use and no such material shall be
published if we shall reasonably and promptly object.
You shall comply with the applicable Federal and State
laws and regulations where our Shares are offered for sale and
conduct your affairs with us and with dealers, brokers or
investors in accordance with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.
12. Redemption or Repurchase Within Seven Days. If Shares
are tendered to us for redemption or repurchase by us within
seven business days after your acceptance of the original
purchase order for such Shares, you will immediately refund to us
the full sales commission (net of allowances to dealers or
brokers) allowed to you on the original sale, and will promptly,
upon receipt thereof, pay to us any refunds from dealers or
brokers of the balance of sales commissions reallowed by you. We
shall notify you of such tender for redemption within 10 days of
the day on which notice of such tender for redemption is received
by us.
13. Other Activities. Your services pursuant to this
Agreement shall not be deemed to be exclusive, and you may render
similar services and act as an underwriter, distributor or dealer
for other investment companies in the offering of their shares.
14. Term of Agreement. This Agreement shall become
effective on the date of its execution, and shall remain in
effect for a period of two (2) years. The Agreement is renewable
annually thereafter, with respect to each Fund of the Trust, for
successive periods not to exceed one year (i) by a vote of a
majority of the outstanding voting securities of each Fund of the
Trust or by a vote of the Board of Trustees of the Trust, and
(ii) by a vote of a majority of the trustees of the Trust who are
not parties to the Agreement or interested persons of any parties
to the Agreement (other than as Trustees of the Trust), cast in
person at a meeting called for the purpose of voting on the
Agreement.
This Agreement may at any time be terminated by a Fund
without the payment of any penalty, (i) either by vote of the
Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Fund on 90 days' written
notice to you; or (ii) by you on 90 days' written notice to the
Fund; and shall immediately terminate with respect to a Fund in
the event of its assignment.
15. Suspension of Sales. We reserve the right at all times
to suspend or limit the public offering of Shares upon two days'
written notice to you.
16. Miscellaneous. This Agreement shall be subject to the
laws of the State of California and shall be interpreted and
construed to further promote the operation of the Trust as an
open-end investment company. As used herein, the terms "Net
Asset Value," "Offering Price," "Investment Company," "Open-End
Investment Company," "Assignment," "Principal Underwriter,"
"Interested Person," "Parent," "Affiliated Person," and "Majority
of the Outstanding Voting Securities" shall have the meanings set
forth in the 1933 Act or the 1940 Act and the Rules and
Regulations thereunder.
Nothing herein shall be deemed to protect you against any
liability to us or to our securities holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations and
duties hereunder.
If the foregoing meets with your approval, please acknowledge
your acceptance by signing each of the enclosed copies, whereupon
this will become a binding agreement as of the date set forth
below.
Very truly yours,
Franklin Templeton Money Fund Trust
By:_______________________________
Accepted:
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:__________________________________
DATED: [Date]
CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT ("Agreement") is made and
entered into as of ______________, 1995, by and between FRANKLIN
TEMPLETON MONEY FUND TRUST, on behalf of Franklin Templeton Money
Fund II and any future series of the trust (hereinafter
collectively referred to as the "Fund"), and BANK OF AMERICA
NATIONAL FUND AND SAVINGS ASSOCIATION, a banking association
organized under the laws of the United States (the "Custodian").
RECITALS
A. The Fund is an investment company registered under
the Investment Company Act of 1940, as amended (the "Investment
Company Act") that invests and reinvests, on behalf of its
series, in Domestic Securities and Foreign Securities.
B. The Custodian is, and has represented to the Fund
that the Custodian is, a "bank" as that term is defined in
Section 2(a)(5) of the Investment Company Act of 1940, as amended
and is eligible to receive and maintain custody of investment
company assets pursuant to Section 17(f) and Rule 17f-2
thereunder.
C. The Fund and the Custodian desire to provide for
the retention of the Custodian as a custodian of the assets of
the Fund's two current series, The Money Market Portfolio and The
U.S. Government Securities Money Market Portfolio, and such
subsequent series as the parties hereto may determine from time-
to-time, on the terms and subject to the provisions set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS
For purposes of this Agreement, the following terms
shall have the respective meanings specified below:
"Agreement" shall mean this Custody Agreement.
"Board of Trustees" shall mean the Board of Trustees of
the Fund.
"Business Day" with respect to any Domestic Security
means any day, other than a Saturday or Sunday, that is not a day
on which banking institutions are authorized or required by law
to be closed in The City of New York and, with respect to Foreign
Securities, a London Business Day. "London Business Day" shall
mean any day on which dealings and deposits in U.S. dollars are
transacted in the London interbank market.
"Custodian" shall mean Bank of America National Trust
and Savings Association.
"Domestic Securities" shall have the meaning provided
in Subsection 2.1 hereof.
"Executive Committee" shall mean the executive
committee of the Board of Trustees.
"Foreign Custodian" shall have the meaning provided in
Section 4.1 hereof.
"Foreign Securities" shall have the meaning provided in
Section 2.1 hereof.
"Foreign Securities Depository" shall have the meaning
provided in Section 4.1 hereof.
"Fund" shall mean the Franklin Templeton Money Fund
Trust and any separate series of the Fund hereinafter organized.
"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended.
"Securities" shall have the meaning provided in Section
2.1 hereof.
"Securities System" shall have the meaning provided in
Section 3.1 hereof.
"Securities System Account" shall have the meaning
provided in Subsection 3.8(a) hereof.
"Shares" shall mean shares of beneficial interest of
the Fund.
"Subcustodian" shall have the meaning provided in
Subsection 3.7 hereof, but shall not include any Foreign
Custodian.
"Transfer Agent" shall mean the duly appointed and
acting transfer agent for the Fund.
"Writing" shall mean a communication in writing, a
communication by telex, the Custodian's Global Custody
Instruction SystemTM, facsimile transmission, bankwire or other
teleprocess or electronic instruction system acceptable to the
Custodian.
Section 2. APPOINTMENT OF CUSTODIAN; DELIVERY OF ASSETS
2.1 Appointment of Custodian. The Fund hereby
appoints and designates the Custodian as a custodian of the
assets of the Fund including cash, securities the Fund desires to
be held within the United States ("Domestic Securities") and
securities it desires to be held outside the United States
("Foreign Securities"). Domestic Securities and Foreign
Securities are sometimes referred to herein, collectively, as
"Securities." The Custodian hereby accepts such appointment and
designation and agrees that it shall maintain custody of the
assets of the Fund delivered to it hereunder in the manner
provided for herein.
2.2 Delivery of Assets. The Fund agrees to deliver to
the Custodian Securities and cash owned by the Fund, payments of
income, principal or capital distributions received by the Fund
with respect to Securities owned by the Fund from time to time,
and the consideration received by it for such Shares or other
securities of the Fund as may be issued and sold from time to
time. The Custodian shall have no responsibility whatsoever for
any property or assets of the Fund held or received by the Fund
and not delivered to the Custodian pursuant to and in accordance
with the terms hereof. All Securities accepted by the Custodian
on behalf of the Fund under the terms of this Agreement shall be
in "street name" or other good delivery form as determined by the
Custodian.
2.3 Subcustodians. Upon receipt of Proper
Instructions and a certified copy of a resolution of the Board of
Trustees or of the Executive Committee certified by the Secretary
or an Assistant Secretary of the Fund, the Custodian may from
time to time appoint one or more Subcustodians or Foreign
Custodians to hold assets of the Fund in accordance with the
provisions of this Agreement.
2.4 No Duty to Manage. The Custodian, a Subcustodian
or a Foreign Custodian shall not have any duty or responsibility
to manage or recommend investments of the assets of the Fund held
by them or to initiate any purchase, sale or other investment
transaction in the absence of Proper Instructions or except as
otherwise specifically provided herein.
Section 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO
ASSETS OF THE FUND HELD BY THE CUSTODIAN
3.1 Holding Securities. The Custodian shall hold and
physically segregate from any property owned by the Custodian,
for the account of the Fund, all non-cash property delivered by
the Fund to the Custodian hereunder other than Securities which,
pursuant to Subsection 3.8 hereof, are held through a registered
clearing agency, a registered securities depository, the Federal
Reserve's book-entry securities system (referred to herein,
individually, as a "Securities System"), or held by a
Subcustodian, Foreign Custodian or in a Foreign Securities
Depository.
3.2 Delivery of Securities. Except as otherwise
provided in Subsection 3.5 hereof, the Custodian, upon receipt of
Proper Instructions, shall release and deliver Securities owned
by the Fund and held by the Custodian in the following cases or
as otherwise directed in Proper Instructions:
(a) except as otherwise provided herein, upon
sale of such Securities for the account of the Fund and receipt
by the Custodian, a Subcustodian or a Foreign Custodian of
payment therefor;
(b) upon the receipt of payment by the Custodian,
a Subcustodian or a Foreign Custodian in connection with any
repurchase agreement related to such Securities entered into by
the Fund;
(c) in the case of a sale effected through a
Securities System, in accordance with the provisions of
Subsection 3.8 hereof;
(d) to a tender agent or other authorized agent
in connection with (i) a tender or other similar offer for
Securities owned by the Fund, or (ii) a tender offer or
repurchase by the Fund of its own Shares;
(e) to the issuer thereof or its agent when such
Securities are called, redeemed, retired or otherwise become
payable; provided, that in any such case, the cash or other
consideration is to be delivered to the Custodian, a Subcustodian
or a Foreign Custodian;
(f) to the issuer thereof, or its agent, for
transfer into the name or nominee name of the Fund, the name or
nominee name of the Custodian, the name or nominee name of any
Subcustodian or Foreign Custodian; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new Securities are to be
delivered to the Custodian, a Subcustodian or Foreign Custodian;
(g) to the broker selling the same for
examination in accordance with the "street delivery" custom;
(h) for exchange or conversion pursuant to any
plan of merger, consolidation, recapitalization, or
reorganization of the issuer of such Securities, or pursuant to a
conversion of such Securities; provided that, in any such case,
the new Securities and cash, if any, are to be delivered to the
Custodian or a Subcustodian;
(i) in the case of warrants, rights or similar
securities, the surrender thereof in connection with the exercise
of such warrants, rights or similar Securities or the surrender
of interim receipts or temporary Securities for definitive
Securities; provided that, in any such case, the new Securities
and cash, if any, are to be delivered to the Custodian, a
subcustodian or a Foreign Custodian;
(j) for delivery in connection with any loans of
Securities made by the Fund, but only against receipt by the
Custodian, a Subcustodian or a Foreign Custodian of adequate
collateral as determined by the Fund (and identified in Proper
Instructions communicated to the Custodian), which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be credited
to the account of the Custodian, a Subcustodian or a Foreign
Custodian in the Federal Reserve's book-entry securities system,
the Custodian will not be held liable or responsible for the
delivery of Securities owned by the Fund prior to the receipt of
such collateral;
(k) for delivery as security in connection with
any borrowings by the Fund requiring a pledge of assets by the
Fund, but only against receipt by the Custodian, a Subcustodian
or a Foreign Custodian of amounts borrowed;
(l) for delivery in accordance with the
provisions of any agreement among the Fund, the Custodian, a
Subcustodian or a Foreign Custodian and a broker-dealer relating
to compliance with the rules of registered clearing corporations
and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
(m) for delivery in accordance with the
provisions of any agreement among the Fund, the Custodian, a
Subcustodian or a Foreign Custodian and a futures commission
merchant, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market, or any
similar organization or organizations, regarding account deposits
in connection with transactions by the Fund;
(n) upon the receipt of instructions from the
Transfer Agent for delivery to the Transfer Agent or to the
holders of Shares in connection with distributions in kind in
satisfaction of requests by holders of Shares for repurchase or
redemption; and
(o) for any other proper purpose, but only upon
receipt of proper Instructions, and a certified copy of a
resolution of the Trustees or of the Executive Committee
certified by the Secretary or an Assistant Secretary of the Fund,
specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons
to whom delivery of such securities shall be made.
3.3 Registration of Securities. Securities held by
the Custodian, a Subcustodian or a Foreign Custodian (other than
bearer Securities) shall be registered in the name or nominee
name of the Fund, in the name or nominee name of the Custodian or
in the name or nominee name of any Subcustodian or Foreign
Custodian. The Fund agrees to hold the Custodian, any such
nominee, Subcustodian or Foreign Custodian harmless from any
liability as a holder of record of such Securities.
3.4 Bank Accounts. The Custodian shall open and
maintain a separate bank account or accounts for the Fund,
subject only to draft or order by the Custodian acting pursuant
to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by
it hereunder from or for the account of the Fund, other than cash
maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act.
Funds held by the Custodian for the Fund may be deposited by it
to its credit as Custodian in the banking departments of the
Custodian, a Subcustodian or a Foreign Custodian. It is
understood and agreed by the Custodian and the Fund that the rate
of interest, if any, payable on such funds (including foreign
currency deposits) that are deposited with the Custodian may not
be a market rate of interest and that the rate of interest
payable by the Custodian to the Fund shall be agreed upon by the
Custodian and the Fund from time to time. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall
be withdrawable by the Custodian only in that capacity.
3.5 Collection of Income; Trade Settlement; Crediting
of Accounts. The Custodian shall collect income payable with
respect to Securities owned by the Fund, settle Securities trades
for the account of the Fund and credit and debit the Fund's
account with the Custodian in connection therewith as follows:
(a) Upon receipt of Proper Instructions, the
Custodian shall effect the purchase of a Security by charging the
account of the Fund on the contractual settlement date. The
Custodian shall have no liability of any kind to any person,
including the Fund, if the Custodian effects payment on behalf of
the Fund as provided for herein or in Proper Instructions, and
the seller or selling broker fails to deliver the Securities
purchased.
(b) Upon receipt of Proper Instructions, the
Custodian shall effect the sale of a Security by delivering a
certificate or other indicia of ownership, and shall credit the
account of the Fund with the proceeds of such sale on the
contractual settlement date. The Custodian shall have no
liability of any kind to any person, including the Fund, if the
Custodian delivers such a certificate(s) or other indicia of
ownership as provided for herein or in Proper Instructions, and
the purchaser or purchasing broker fails to effect payment to the
Fund within a reasonable time period, as determined by the
Custodian in its sole discretion. In such event, the Custodian
shall be entitled to reimbursement of the amount so credited to
the account of the Fund in connection with such sale.
(c) The Fund is responsible for ensuring that the
Custodian receives timely and accurate Proper Instructions to
enable the Custodian to effect settlement of any purchase or
sale. If the Custodian does not receive such instructions within
the required time period, the Custodian shall have no liability
of any kind to any person, including the Fund, for failing to
effect settlement on the contractual settlement date. However,
the Custodian shall use its best reasonable efforts to effect
settlement as soon as possible after receipt of Proper
Instructions.
(d) The Custodian shall credit the account of the
Fund with interest income payable on interest bearing Securities
on payable date. Interest income on cash balances will be
credited monthly to the account of the Fund on the first Business
Day (on which the Custodian is open for business) following the
end of each month. Dividends and other amounts payable with
respect to Domestic Securities and Foreign Securities shall be
credited to the account of the Fund when received by the
Custodian. The Custodian shall not be required to commence suit
or collection proceedings or resort to any extraordinary means to
collect such income and other amounts payable with respect to
Securities owned by the Fund. The collection of income due the
Fund on Domestic Securities loaned pursuant to the provisions of
Subsection 3.2(j) shall be the responsibility of the Fund. The
Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information
or data as may be necessary to assist the Fund in arranging for
the timely delivery to the Custodian of the income to which the
Fund is entitled. The Custodian shall have no liability to any
person, including the Fund, if the Custodian credits the account
of the Fund with such income or other amounts payable with
respect to Securities owned by the Fund (other than Securities
loaned by the Fund pursuant to Subsection 3.2(j) hereof) and the
Custodian subsequently is unable to collect such income or other
amounts from the payors thereof within a reasonable time period,
as determined by the Custodian in its sole discretion. In such
event, the Custodian shall be entitled to reimbursement of the
amount so credited to the account of the Fund.
3.6 Payment of Fund Monies. Upon receipt of Proper
Instructions the Custodian shall pay out monies of the Fund in
the following cases or as otherwise directed in Proper
Instructions:
(a) upon the purchase of Securities, futures
contracts or options on futures contracts for the account of the
Fund but only, except as otherwise provided herein, (i) against
the delivery of such securities, or evidence of title to futures
contracts or options on futures contracts, to the Custodian or a
Subcustodian registered pursuant to Subsection 3.3 hereof or in
proper form for transfer; (ii) in the case of a purchase effected
through a Securities System, in accordance with the conditions
set forth in Subsection 3.8 hereof; or (iii) in the case of
repurchase agreements entered into between the Fund and the
Custodian, another bank or a broker-dealer (A) against delivery
of the Securities either in certificated form to the Custodian or
a Subcustodian or through an entry crediting the Custodian's
account at the appropriate Federal Reserve Bank with such
Securities or (B) against delivery of the confirmation evidencing
purchase by the Fund of Securities owned by the Custodian or such
broker-dealer or other bank along with written evidence of the
agreement by the Custodian or such broker-dealer or other bank to
repurchase such Securities from the Fund;
(b) in connection with conversion, exchange or
surrender of Securities owned by the Fund as set forth in
Subsection 3.2 hereof;
(c) for the redemption or repurchase of Shares
issued by the Fund;
(d) for the payment of any expense or liability
incurred by the Fund, including but not limited to the following
payments for the account of the Fund: custodian fees, interest,
taxes, management, accounting, transfer agent and legal fees and
operating expenses of the Fund whether or not such expenses are
to be in whole or part capitalized or treated as deferred
expenses; and
(e) for the payment of any dividends or
distributions declared by the Board of Trustees with respect to
the Shares.
3.7 Appointment of Subcustodians. The Custodian may,
upon receipt of Proper Instructions, appoint another bank or Fund
company, which is itself qualified under the Investment Company
Act to act as a custodian (a "Subcustodian"), as the agent of the
Custodian to carry out such of the duties of the Custodian
hereunder as a Custodian may from time to time direct; provided,
however, that the appointment of any Subcustodian shall not
relieve the Custodian of its responsibilities or liabilities
hereunder.
3.8 Deposit of Securities in Securities Systems. The
Custodian may deposit and/or maintain Domestic Securities owned
by the Fund in a Securities System in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following
provisions:
(a) the Custodian may hold Domestic Securities of
the Fund in the Depository Trust Company or the Federal Reserve's
book entry system or, upon receipt of Proper Instructions, in
another Securities System provided that such securities are held
in an account of the Custodian in the Securities System
("Securities System Account") which shall not include any assets
of the Custodian other than assets held as a fiduciary, custodian
or otherwise for customers;
(b) the records of the Custodian with respect to
Domestic Securities of the Fund which are maintained in a
Securities System shall identify by book-entry those Domestic
Securities belonging to the Fund;
(c) the Custodian shall pay for Domestic
Securities purchased for the account of the Fund upon (i)
receipt of advice from the Securities System that such securities
have been transferred to the Securities System Account, and (ii)
the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer Domestic Securities sold for the
account of the Fund upon (A) receipt of advice from the
Securities System that payment for such securities has been
transferred to the Securities System Account, and (B) the making
of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of all
advices from the Securities System of transfers of Domestic
Securities for the account of the Fund shall be maintained for
the Fund by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the Fund
in the form of a written advice or notice; and
(d) upon request, the Custodian shall provide the
Fund with any report obtained by the Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding domestic securities deposited in the
Securities System.
3.9 Segregated Account. The Custodian shall upon
receipt of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of the Fund,
into which account or accounts may be transferred cash and/or
Securities, including Securities maintained in an account by the
Custodian pursuant to Section 3.8 hereof, (i) in accordance with
the provisions of any agreement among the Fund, the Custodian and
a broker-dealer or futures commission merchant, relating to
compliance with the rules of registered clearing corporations and
of any national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii)
for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the
Fund and (iii) for other proper corporate purposes, but only, in
the case of this clause (iii), upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee certified by the
Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes
to be proper corporate purposes.
3.10 Ownership Certificates for Tax Purposes. The
Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to domestic
securities of the Fund held by it and in connection with
transfers of such securities.
3.11 Proxies. The Custodian shall, with respect to
the Securities held hereunder, promptly deliver to the Fund all
proxies, all proxy soliciting materials and all notices relating
to such Securities. If the Securities are registered otherwise
than in the name of the Fund or a nominee of the Fund, the
Custodian shall use its best reasonable efforts, consistent with
applicable law, to cause all proxies to be promptly executed by
the registered holder of such Securities in accordance with
Proper Instructions.
3.12 Communications Relating to Fund Portfolio
Securities. The Custodian shall transmit promptly to the Fund
all written information (including, without limitation, pendency
of calls and maturities of Securities and expirations of rights
in connection therewith and notices of exercise of put and call
options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from
issuers of Securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall transmit promptly
to the Fund all written information received by the Custodian
from issuers of the Securities whose tender or exchange is sought
and from the party (or its agents) making the tender or exchange
offer. If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction,
the Fund shall notify the Custodian at least three Business Days
prior to the date of which the Custodian is to take such action.
3.13 Reports by Custodian. Custodian shall each
business day furnish the Fund with a statement summarizing all
transactions and entries for the account of the Fund for the
preceding day. At the end of every month Custodian shall furnish
the Fund with a list of the portfolio securities showing the
quantity of each issue owned, the cost of each issue and the
market value of each issue at the end of each month. Such
monthly report shall also contain separate listings of (a)
unsettled trades and (b) when-issued securities. Custodian shall
furnish such other reports as may be mutually agreed upon from
time-to-time.
Section 4. CERTAIN DUTIES OF THE CUSTODIAN WITH RESPECT
TO ASSETS OF THE FUND HELD OUTSIDE THE UNITED
STATES
4.1 Custody outside the United States. The Fund
authorizes the Custodian to hold Foreign Securities and cash in
custody accounts which have been established by the Custodian
with (i) its foreign branches, (ii) foreign banking institutions,
foreign branches of United States banks and subsidiaries of
United States banks or bank holding companies (each a "Foreign
Custodian") and (iii) Foreign Securities depositories or clearing
agencies (each a "Foreign Securities Depository"); provided,
however, that the Board of Trustees or the Executive Committee
has approved in advance the use of each such Foreign Custodian
and Foreign Securities Depository and the contract between the
Custodian and each Foreign Custodian and that such approval is
set forth in Proper Instructions and a certified copy of a
resolution of the Board of Trustees or of the Executive Committee
certified by the Secretary or an Assistant Secretary of the Fund.
Unless expressly provided to the contrary in this Section 4,
custody of Foreign Securities and assets held outside the United
States by the Custodian, a Foreign Custodian or through a Foreign
Securities Depository shall be governed by Section 3 hereof.
4.2 Assets to be Held. The Custodian shall limit the
securities and other assets maintained in the custody of its
foreign branches, Foreign Custodians and Foreign Securities
Depositories to: (i) "foreign securities", as defined in
paragraph (c) (1) of Rule 17f-5 under the Investment Company Act,
and (ii) cash and cash equivalents in such amounts as the
Custodian or the Fund may determine to be reasonably necessary to
effect the Fund's Foreign Securities transactions.
4.3 Foreign Securities Depositories. Except as may
otherwise be agreed upon in writing by the Custodian and the
Fund, assets of the Fund shall be maintained in Foreign
Securities Depositories only through arrangements implemented by
the Custodian or Foreign Custodians pursuant to the terms hereof.
4.4 Segregation of Securities. The Custodian shall
identify on its books and records as belonging to the Fund, the
Foreign Securities of the Fund held by each Foreign Custodian.
4.5 Agreements with Foreign Custodians. Each
agreement with a Foreign Custodian shall provide generally that:
(a) the Fund's assets will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of the
Foreign Custodian or its creditors, except a claim of payment for
their safe custody or administration; (b) beneficial ownership
for the Fund's assets will be freely transferable without the
payment of money or value other than for custody or
administration; (c) adequate records will be maintained
identifying the assets as belonging to the Fund; (d) the
independent public accountants for the Fund, will be given access
to the records of the Foreign Custodian relating to the assets of
the Fund or confirmation of the contents of those records; (e)
the disposition of assets of the Fund held by the Foreign
Custodian will be subject only to the instructions of the
Custodian or its agents; (f) the Foreign Custodian shall
indemnify and hold harmless the Custodian and the Fund from and
against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Custodian's
performance of its obligations under such agreement; (g) to the
extent practicable, the Fund's assets will be adequately insured
in the event of loss; and (h) the Custodian will receive periodic
reports with respect to the safekeeping of the Fund's assets,
including notification of any transfer to or from the Fund's
account.
4.6 Access of Independent Accountants of the Fund.
Upon request of the Fund, the Custodian will use its best
reasonable efforts to arrange for the independent accountants of
the Fund to be afforded access to the books and records of any
Foreign Custodian insofar as such books and records relate to the
custody by any such Foreign Custodian of assets of the Fund.
4.7 Transactions in Foreign Custody Accounts. Upon
receipt of Proper Instructions, the Custodian shall instruct the
appropriate Foreign Custodian to transfer, exchange or deliver
Foreign Securities owned by the Fund, but, except to the extent
explicitly provided herein, only in any of the cases specified in
Subsection 3.2. Upon receipt of Proper Instructions, the
Custodian shall pay out or instruct the appropriate Foreign
Custodian to pay out monies of the Fund in any of the cases
specified in Subsection 3.6. Notwithstanding anything herein to
the contrary, settlement and payment for Foreign Securities
received for the account of the Fund and delivery of Foreign
Securities maintained for the account of the Fund may be effected
in accordance with the customary or established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer. Foreign Securities maintained in the custody of a
Foreign Custodian may be maintained in the name of such entity or
its nominee name to the same extent as set forth in Section 3.3
of this Agreement and the Fund agrees to hold any Foreign
Custodian and its nominee harmless from any liability as a holder
of record of such securities.
4.8 Liability of Foreign Custodian. Each agreement
between the Custodian and a Foreign Custodian shall require the
Foreign Custodian to exercise reasonable care in the performance
of its duties and to indemnify and hold harmless the Custodian
and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the
Foreign Custodian's performance of such obligations. At the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claims against a
Foreign Custodian as a consequence of any such loss, damage,
cost, expense, liability or claim if and to the extent that the
Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
4.9 Monitoring Responsibilities.
(a) The Custodian will promptly inform the Fund
in the event that the Custodian learns of a material adverse
change in the financial condition of a Foreign Custodian or is
notified by (i) a foreign banking institution employed as a
Foreign Custodian that there appears to be a substantial
likelihood that its shareholders' equity will decline below $200
million or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally
accepted United States accounting principles) and denominated in
U.S. dollars, or (ii) a subsidiary of a United States bank or
bank holding company acting as a Foreign Custodian that there
appears to be a substantial likelihood that its shareholders'
equity will decline below $100 million or that its shareholders'
equity has declined below $100 million (in each case computed in
accordance with generally accepted United States accounting
principles) and denominated in U.S. dollars.
(b) The custodian will furnish such information
as may be reasonably necessary to assist the Fund's Board of
Trustees in its annual review and approval of the continuance of
all contracts or arrangements with Foreign Subcustodians.
Section 5. PROPER INSTRUCTIONS
As used in this Agreement, the term "Proper
Instructions" means instructions of the Fund received by the
Custodian via telephone or in Writing which the Custodian
believes in good faith to have been given by Authorized Persons
(as defined below) or which are transmitted with proper testing
or authentication pursuant to terms and conditions which the
Custodian may specify. Any Proper Instructions delivered to the
Custodian by telephone shall promptly thereafter be confirmed in
Writing by an Authorized Person, but the Fund will hold the
Custodian harmless for its failure to send such confirmation in
writing, the failure of such confirmation to conform to the
telephone instructions received or the Custodian's failure to
produce such confirmation at any subsequent time. Unless
otherwise expressly provided, all Proper Instructions shall
continue in full force and effect until cancelled or superseded.
If the Custodian requires test arrangements, authentication
methods or other security devices to be used with respect to
Proper Instructions, any Proper Instructions given by the Fund
thereafter shall be given and processed in accordance with such
terms and conditions for the use of such arrangements, methods or
devices as the Custodian may put into effect and modify from time
to time. The Fund shall safeguard any testkeys, identification
codes or other security devices which the Custodian shall make
available to it. The Custodian may electronically record any
Proper Instructions given by telephone, and any other telephone
discussions, with respect to its activities hereunder. As used
in this Agreement, the term "Authorized Persons" means such
officers or such agents of the Fund as have been designated by a
resolution of the Board of Trustees or of the Executive
Committee, a certified copy of which has been provided to the
Custodian, to act on behalf of the Fund under this Agreement.
Each of such persons shall continue to be an Authorized Person
until such time as the Custodian receives Proper Instructions
that any such officer or agent is no longer an Authorized Person.
Notwithstanding anything to the contrary contained in
this Agreement, if the Fund has executed or is otherwise bound by
a funds transfer service agreement, electronic trade payment
service agreement, license agreement for electronic access,
MicroWire (registered Trademark) service agreement or similar
agreement, and any related addenda and amendments thereto (each,
a "Service Agreement"), between the Fund and the Custodian, with
regard to the transfer of funds to and/or disbursement of funds
from an account of the Fund, then any electronic instruction on
the part of the Fund and the Custodian's obligations relating
thereto shall be governed by the applicable Service Agreement.
To the extent that anything in this Agreement relating to
electronic instructions to transfer and/or disburse funds is
inconsistent with any provision of the Service Agreement, the
Service Agreement shall control.
Section 6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express
authority from the Fund:
(a) make payments to itself or others for minor
expenses of handling Securities or other similar items relating
to its duties under this Agreement, provided that all such
payments shall be accounted for to the Fund;
(b) endorse for collection, in the name of the
Fund, checks, drafts and other negotiable instruments; and
(c) in general, attend to all non-discretionary
details in connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the Securities and
property of the Fund except as otherwise provided in Proper
Instructions.
Section 7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any
instructions (conveyed by telephone or in Writing), notice,
request, consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly given or
executed by or on behalf of the Fund. The Custodian may receive
and accept a certified copy of a resolution of the Board of
Trustees or Executive Committee as conclusive evidence (a) of the
authority of any person to act in accordance with such resolution
or (b) of any determination or of any action by the Board of
Trustees or Executive Committee as described in such resolution,
and such resolution may be considered as in full force and effect
until receipt by the Custodian of written notice by an Authorized
Person to the contrary.
Section 8. DUTY OF CUSTODIAN TO SUPPLY INFORMATION
The Custodian shall cooperate with and supply necessary
information in its possession (to the extent permissible under
applicable law) to the entity or entities appointed by the Board
of Trustees to keep the books of account of the Fund and/or
compute the net asset value per Share of the outstanding Shares
of the Fund.
Section 9. RECORDS
The Custodian shall create and maintain all records
relating to its activities under this Agreement which are
required with respect to such activities under Section 31 of the
Investment Company Act and Rules 31a-1 and 31a-2 thereunder. All
such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents
of the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of Securities owned by the Fund
and held by the Custodian and shall, when requested to do so by
the Fund and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers
in such tabulations.
Section 10. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian, as
agreed upon from time to time between the Fund and the Custodian.
Section 11. RESPONSIBILITY OF CUSTODIAN
The Custodian shall be responsible for the performance
of only such duties as are set forth herein or contained in
Proper Instructions and shall use reasonable care in carrying out
such duties. The Custodian shall be liable to the Fund for any
loss which shall occur as the result of the failure of a Foreign
Custodian or a Foreign Securities Depository engaged by such
Foreign Custodian or the Custodian to exercise reasonable care
with respect to the safekeeping of securities and other assets of
the Fund to the same extent that the Custodian would be liable to
the Fund if the Custodian itself were holding such securities and
other assets. In the event of any loss to the Fund by reason of
the failure of the Custodian, a Foreign Custodian or a Foreign
Securities Depository engaged by such Foreign Custodian or the
Custodian to utilize reasonable care, the Custodian shall be
liable to the Fund to the extent of the Fund's damages, to be
determined based on the market value of the property which is the
subject of the loss at the date of discovery of such loss and
without reference to any special conditions or circumstances.
The Custodian shall be held to the exercise of reasonable care in
carrying out this Agreement. The Fund agrees to indemnify and
hold harmless the Custodian and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including
legal fees and expenses) incurred by any of them in connection
with the performance of this Agreement, except such as may arise
from any negligent action, negligent failure to act or willful
misconduct on the part of the indemnified entity or any Foreign
Custodian or Foreign Securities Depository. The Custodian shall
be entitled to rely, and may act, on advice of counsel (who may
be counsel for the Fund) on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to
such advice. The Custodian need not maintain any insurance for
the benefit of the Fund.
All collections of funds or other property paid or
distributed in respect of Securities held by the Custodian,
agent, Subcustodian or Foreign Custodian hereunder shall be made
at the risk of the Fund. The Custodian shall have no liability
for any loss occasioned by delay in the actual receipt of notice
by the Custodian, agent, Subcustodian or by a Foreign Custodian
of any payment, redemption or other transaction regarding
securities in respect of which the Custodian has agreed to take
action as provided in Section 3 hereof. The Custodian shall not
be liable for any action taken in good faith upon Proper
Instructions or upon any certified copy of any resolution of the
Board of Trustees and may rely on the genuineness of any such
documents which it may in good faith believe to be validly
executed. The Custodian shall not be liable for any loss
resulting from, or caused by, the direction of the Fund to
maintain custody of any Securities or cash in a foreign country
including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, civil
disturbance, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation or other similar occurrences
or events beyond the control of the Custodian. Finally, the
Custodian shall not be liable for any taxes, including interest
and penalties with respect thereto, that may be levied or
assessed upon or in respect of any assets of the Fund held by the
Custodian.
Section 12. LIMITED LIABILITY OF THE FUND
The Custodian acknowledges that it has received notice
of and accepts the limitations of the Fund's liability as set
forth in its Agreement and Declaration of Fund. The Custodian
agrees that the Fund's obligation hereunder shall be limited to
the assets of the Fund, and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the
Fund nor from any Fundee, officer, employee, or agent of the
Fund.
Section 13. EFFECTIVE PERIOD; TERMINATION
This Agreement shall become effective as of the date of
its execution and shall continue in full force and effect until
terminated as hereinafter provided. This Agreement may be
terminated by the Fund or the Custodian by 60 days notice in
Writing to the other provided that any termination by the Fund
shall be authorized by a resolution of the Board of Trustees, a
certified copy of which shall accompany such notice of
termination, and provided further, that such resolution shall
specify the names of the persons to whom the Custodian shall
deliver the assets of the Fund held by it. If notice of
termination is given by the Custodian, the Fund shall, within 60
days following the giving of such notice, deliver to the
Custodian a certified copy of a resolution of the Board of
Trustees specifying the names of the persons to whom the
Custodian shall deliver assets of the Fund held by it. In either
case the Custodian will deliver such assets to the persons so
specified, after deducting therefrom any amounts which the
Custodian determines to be owed to it hereunder (including all
costs and expenses of delivery or transfer of Fund assets to the
persons so specified). If within 60 days following the giving of
a notice of termination by the Custodian, the Custodian does not
receive from the Fund a certified copy of a resolution of the
Board of Trustees specifying the names of the persons to whom the
Custodian shall deliver the assets of the Fund held by it, the
Custodian, at its election, may deliver such assets to a bank or
Fund company doing business in the State of California to be held
and disposed of pursuant to the provisions of this Agreement or
may continue to hold such assets until a certified copy of one or
more resolutions as aforesaid is delivered to the Custodian. The
obligations of the parties hereto regarding the use of reasonable
care, indemnities and payment of fees and expenses shall survive
the termination of this Agreement.
Section 14. MISCELLANEOUS
14.1 Relationship. Nothing contained in this Agreement
shall (i) create any fiduciary, joint venture or partnership
relationship between the Custodian and the Fund or (ii) be
construed as or constitute a prohibition against the provision by
the Custodian or any of its affiliates to the Fund of investment
banking, securities dealing or brokerages services or any other
banking or financial services.
14.2 Further Assurances. Each party hereto shall
furnish to the other party hereto such instruments and other
documents as such other party may reasonably request for the
purpose of carrying out or evidencing the transactions
contemplated by this Agreement.
14.3 Attorneys' Fees. If any lawsuit or other action
or proceeding relating to this Agreement is brought by a party
hereto against the other party hereto, the prevailing party shall
be entitled to recover reasonable attorneys' fees, costs and
disbursements (including allocated costs and disbursements of in-
house counsel), in addition to any other relief to which the
prevailing party may be entitled.
14.4 Notices. Except as otherwise specified herein,
each notice or other communication hereunder shall be in Writing
and shall be delivered to the intended recipient at the following
address (or at such other address as the intended recipient shall
have specified in a written notice given to the other parties
hereto):
if to the Fund :
Franklin Templeton Money Fund Trust
c/o Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, CA 94404
Attention: Fund Manager
if to the Custodian:
Bank of America NT&SA
1455 Market Street
16th Floor, Department 5014
San Francisco, CA 94104
14.5 Headings. The underlined headings contained
herein are for convenience of reference only, shall not be deemed
to be a part of this Agreement and shall not be referred to in
connection with the interpretation hereof.
14.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and both
of which, when taken together, shall constitute one agreement.
14.7 Governing Law. This Agreement shall be
construed in accordance with, and governed in all respects by,
the laws of the State of California (without giving effect to
principles of conflict of laws).
14.8 Force Majeure. Subject to the provisions of
Section 11 hereof regarding the Custodian's general standard of
care, no failure, delay or default in performance of any
obligation hereunder shall constitute an event of default or a
breach of this agreement, or give rise to any liability
whatsoever on the part of one party hereto to the other, to the
extent that such failure to perform, delay or default arises out
of a cause beyond the control and without negligence of the party
otherwise chargeable with failure, delay or default; including,
but not limited to: action or inaction of governmental, civil or
military authority; fire; strike; lockout or other labor dispute;
flood; war; riot; theft; earthquake; natural disaster; breakdown
of public or common carrier communications facilities; computer
malfunction; or act, negligence or default of the other party.
This paragraph shall in no way limit the right of either party to
this Agreement to make any claim against third parties for any
damages suffered due to such causes.
14.9 Successors and Assigns. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and assigns, if any.
14.10 Waiver. No failure on the part of any person to
exercise any power, right, privilege or remedy hereunder, and no
delay on the part of any person in the exercise of any power,
right, privilege or remedy hereunder, shall operate as a waiver
thereof; and no single or partial exercise of any such power,
right, privilege or remedy shall preclude any other or further
exercise thereof or of any other power, right, privilege or
remedy.
14.11 Amendments. This Agreement may not be amended,
modified, altered or supplemented other than by means of an
agreement or instrument executed on behalf of each of the parties
hereto.
14.12 Severability. In the event that any provision
of this Agreement, or the application of any such provision to
any person or set of circumstances, shall be determined to be
invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such
provision to persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent
permitted by law.
14.13 Parties in Interest. None of the provisions of
this Agreement is intended to provide any rights or remedies to
any person other than the Fund and the Custodian and their
respective successors and assigns, if any.
14.14 Entire Agreement. This Agreement sets forth the
entire understanding of the parties hereto, and supersedes all
prior agreements and understandings between the parties hereto
relating to the subject matter hereof to the extent inconsistent
herewith.
14.15 Variations of Pronouns. Whenever required by
the context hereof, the singular number shall include the plural,
and vice versa; the masculine gender shall include the feminine
and neuter genders; and the neuter gender shall include the
masculine and feminine genders.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above
written.
"Custodian": BANK OF AMERICA NATIONAL
TRUST
AND SAVINGS ASSOCIATION
By _____________________________
Its_____________________________
"Fund": FRANKLIN TEMPLETON MONEY FUND TRUST
By______________________________
Its_____________________________
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors of
Franklin Templeton Money Fund Trust:
We consent to the inclusions in Pre-Effective Amendment No.
2 to the Registration Statement of Franklin Templeton Money
Fund Trust on Form N-1A (File No. 33-88924) of our report
dated April 17, 1995 on our audit of the financial statement
of the Trust. As of April 13, 1995 and our report dated
August 3, 1994 on our audit of the financial statements and
financial highlights of The Money Market Portfolios (File
No. 811-7038) for the year ended June 30, 1994.
/S/ COOPERS & LYBRAND L.L.P.
San Francisco, California
April 24, 1995
April 13 , 1995
Franklin Templeton Money Fund Trust
777 Mariners Island Blvd.
San Mateo, CA 94404
Gentlemen:
We propose to acquire 100,000 shares of beneficial interest
(the "Shares") of the Franklin Templeton Money Fund II (the
"Fund"), a series of Franklin Templeton Money Fund Trust (the
"Trust") at a purchase price of $1.00 per share for a total of
$100,000.00. We will purchase the Shares in a private offering
prior to the effectiveness of the Form N-1A registration
statement filed by the Fund under the Securities Act of 1933.
The Shares are being purchased pursuant to Section 14 of the
Investment Company Act of 1940 to serve as the seed money for the
Fund prior to the commencement of the public offering of its
shares.
In connection with such purchase, we understand that: (i)
we, the purchaser, intend to acquire the Shares for our own
account as the sole beneficial owner thereof and have no present
intention of redeeming or reselling the Shares so acquired; and
(ii) in the event any of the initial 100,000 Shares are redeemed
during the first five years, the Fund may charge against our
redemption proceeds our pro rata portion of any unamortized
organizational expenses.
We consent to the filing of this Investment Letter as an
exhibit to the Form N-1A registration statement of the Fund.
Sincerely,
FRANKLIN RESOURCES, INC.
By: /s/ Harmon E. Burns
Harmon E. Burns
Executive Vice President
FRANKLIN TEMPLETON MONEY FUND TRUST
PREAMBLE TO DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Act") by Franklin Templeton Money Fund Trust, on
behalf of Franklin Templeton Money Fund II, a newly organized
series (collectively, the "Fund"). The Plan has been approved by
a majority of the Board of Trustees of the Fund (the "Board of
Trustees"), including a majority of the trustees who are not
interested persons of the Fund and who have no direct, or
indirect financial interest in the operation of the Plan (the
"non-interested trustees"), cast in person at a meeting called
for the purpose of voting on such Plan.
In reviewing the Plan, the Board of Trustees considered the
schedule and nature of payments and terms of the Administration
Agreement between the Fund and Franklin Advisers, Inc., the terms
of the Management Agreement between The Money Market Portfolios
(the "master" fund in which the Fund expects to invest all of its
assets) and Franklin Advisers, Inc., and the terms of the
Underwriting Agreement between the Fund and Franklin/Templeton
Distributors, Inc. ("Distributors"). The Board of Trustees
concluded that the compensation of Advisers, under the Management
Agreement, and of Distributors, under the Underwriting Agreement,
was fair and not excessive. The approval of the Plan included a
determination that in the exercise of their reasonable business
judgment and in light of their fiduciary duties, there is a
reasonable likelihood that the Plan will benefit the Fund and its
shareholders.
DISTRIBUTION PLAN
1. (a) The Fund shall pay to Distributors a monthly fee not
to exceed 0.50% per annum of the Fund's average daily net assets
represented by shares of the Fund, as may be determined by the
Fund's Board of Trustees from time to time.
(b) In addition to the amounts described in (a) above,
the Fund shall pay (i) to Distributors for payment to dealers or
others, or (ii) directly to others, an amount not to exceed 0.15%
per annum of the Fund's average daily net assets represented by
shares of the Fund, as may be determined by the Fund's Board of
Trustees from time to time, as a service fee pursuant to
servicing agreements which have been approved from time to time
by the Trustees, including the non-interested trustees.
2. (a) Distributors shall use the monies paid to it
pursuant to Paragraph 1(a) above to assist in the distribution
and promotion of shares of the Fund. Payments made to
Distributors under the Plan may be used for, among other things,
the printing of prospectuses and reports used for sales purposes,
expenses of preparing and distributing sales literature and
related expenses, advertisements, and other distribution-related
expenses, including a pro-rated portion of Distributors' overhead
expenses attributable to the distribution of Fund shares, as well
as for additional distribution fees paid to securities dealers or
their firms or others who have executed agreements with the Fund,
Distributors or its affiliates, which form of agreement has been
approved from time to time by the Trustees, including the non-
interested trustees. In addition, such fees may be used to pay
for advancing the commission costs to dealers or others with
respect to the sale of Fund shares.
(b) The monies to be paid pursuant to paragraph 1(b)
above shall be used to pay dealers or others for, among other
things, furnishing personal services and maintaining shareholder
accounts, which services include, among other things, assisting
in establishing and maintaining customer accounts and records;
assisting with purchase and redemption requests; arranging for
bank wires; monitoring dividend payments from the Fund on behalf
of customers; forwarding certain shareholder communications from
the Fund to customers; receiving and answering correspondence;
and aiding in maintaining the investment of their respective
customers in the Fund. Any amounts paid under this paragraph
2(b) shall be paid pursuant to a servicing or other agreement,
which form of agreement has been approved from time to time by
the Trustees.
3. In addition to the payments which the Fund is authorized
to make pursuant to paragraphs 1 and 2 hereof, to the extent that
the Fund, Advisers, Distributors or other parties on behalf of
the Fund, Advisers or Distributors make payments that are deemed
to be payments by the Fund for the financing of any activity
primarily intended to result in the sale of Fund shares issued by
the Fund within the context of Rule 12b-1 under the Act, then
such payments shall be deemed to have been made pursuant to the
Plan.
In no event shall the aggregate asset-based sales charges
which include payments specified in paragraphs 1 and 2, plus any
other payments deemed to be made pursuant to the Plan under this
paragraph, exceed the amount permitted to be paid pursuant to the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc., Article III, Section 26(d).
4. Distributors shall furnish to the Board of Trustees, for
their review, on a quarterly basis, a written report of the
monies reimbursed to it and to others under the Plan, and shall
furnish the Board of Trustees with such other information as the
Board of Trustees may reasonably request in connection with the
payments made under the Plan in order to enable the Board of
Trustees to make an informed determination of whether the Plan
should be continued.
5. The Plan shall continue in effect for a period of more
than one year only so long as such continuance is specifically
approved at least annually by the Board of Trustees, including
the non-interested trustees, cast in person at a meeting called
for the purpose of voting on the Plan.
6. The Plan, and any agreements entered into pursuant to
this Plan, may be terminated at any time, without penalty, by
vote of a majority of the outstanding voting securities of the
Fund or by vote of a majority of the non-interested trustees, on
not more than sixty (60) days' written notice, or by Distributors
on not more than sixty (60) days' written notice, and shall
terminate automatically in the event of any act that constitutes
an assignment of the Administration Agreement between the Fund
and Advisers, or the Management Agreement between The Money
Market Portfolios and Advisers.
7. The Plan, and any agreements entered into pursuant to
this Plan, may not be amended to increase materially the amount
to be spent for distribution pursuant to Paragraph 1 hereof
without approval by a majority of the Fund's outstanding voting
securities.
8. All material amendments to the Plan, or any agreements
entered into pursuant to this Plan, shall be approved by the non-
interested trustees cast in person at a meeting called for the
purpose of voting on any such amendment.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested trustees shall be
committed to the discretion of such non-interested trustees.
This Plan and the terms and provisions thereof are hereby
accepted and agreed to by the Fund and Distributors as evidenced
by their execution hereof.
FRANKLIN TEMPLETON MONEY FUND TRUST
By:________________________________
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By:_____________________________________
POWER OF ATTORNEY
The undersigned officers and trustees of FRANKLIN TEMPLETON
MONEY FUND TRUST (the "Registrant") hereby appoint MARK H.
PLAFKER, HARMON E. BURNS, DEBORAH R. GATZEK, KAREN L. SKIDMORE
AND LARRY L. GREENE (with full power to each of them to act
alone) his attorney-in-fact and agent, in all capacities, to
execute, and to file any of the documents referred to below
relating to Post-Effective Amendments to the Registrant's
registration statement on Form N-1A under the Investment Company
Act of 1940, as amended, and under the Securities Act of 1933
covering the sale of shares by the Registrant under prospectuses
becoming effective after this date, including any amendment or
amendments increasing or decreasing the amount of securities for
which registration is being sought, with all exhibits and any and
all documents required to be filed with respect thereto with any
regulatory authority. Each of the undersigned grants to each of
said attorneys, full authority to do every act necessary to be
done in order to effectuate the same as fully, to all intents and
purposes as he could do if personally present, thereby ratifying
all that said attorneys-in-fact and agents, may lawfully do or
cause to be done by virtue hereof.
The undersigned officers and trustees hereby execute this
Power of Attorney as of this 17th day of January, 1995.
/s/ Rupert H Johnson, Jr. /s/ Charles B. Johnson
Rupert H. Johnson, Jr. Charles B. Johnson,
President and Trustee Trustee
/s/ Frank H. Abbott III /s/Harris J. Ashton
Frank H. Abbott III, Harris J. Ashton,
Trustee Trustee
/s/ Joseph Fortunato /s/ David W. Garbellano
S. Joseph Fortunato, David W. Garbellano,
Trustee Trustee
/s/ Frank W. T. LaHaye /s/ Gordon S. Macklin
Frank W. T. LaHaye Gordon S. Macklin
Trustee Trustee
/s/ Martin L. Flanagan
Martin L. Flanagan,
Vice President, and
Chief Financial Officer
POWER OF ATTORNEY
The undersigned officers and trustees of THE MONEY MARKET PORTFOLIOS
(the "Registrant") hereby appoint HARMON E. BURNS, DEBORAH R. GATZEK, KAREN L.
SKIDMORE, LARRY L. GREENE, and MARK H. PLAFKER (with full power to each of
them to act alone) as their attorney-in-fact and agent, in all capacities,
to execute, and to file any of the documents referred to below relating to
Post-Effective Amendments to the Registrant's registration statement, or the
registration statementss of other funds investing all or substantially all of
their asets in shares issued by the Registrant, on Form N-1A under the
Investment Company Act of 1940, as amended, and, in the case of a fund
investing all or substantially all of its assets in shares issued
by the Registrant, the Securities Act of 1933, covering the sale
of shares of beneficial interest by the Registrant or such other
fund under prospectuses becoming effective after the date hereof,
including any amendment or amendments filed for the purpose of
updating the prospectus/or SAI, registering securities to be
issued in transactions permitted under the federal securities
laws or increasing or decreasing the amount of securities for
which registration is being sought, with all exhibits and any and
all documents required to be filed with respect thereto with any
regulatory authority. Each of the undersigned grants to each of
said attorneys full authority to do every act necessary to be
done in order to effectuate the same as fully, to all intents and
purposes as he could do if personally present, thereby ratifying
all that said attorneys-in-fact and agents may lawfully do or
cause to be done by virtue hereof.
The undersigned officers and trustees hereby execute this
Power of Attorney as of this 17th day of January 1995.
/s/ Charles E. Johnson /s/ Charles B. Johnson
Charles E. Johnson, Charles B. Johnson, Trustee
/s/ Rupert H. Johnson, Jr. /s/ Frank H. Abbott, III
Rupert H. Johnson, Jr., Frank H. Abbott, III, Trustee
Trustee
/s/ Harris J. Ashton /s/ S. Joseph Fortunato
Harris J. Ashto, Trustee S. Joseph Fortunato, Trustee
/s/ David W. Garbellano /s/Frank W. T. LaHaye
David W. Garbellano, Trustee Frank W. T. LaHaye, Trustee
/s/ Diomedes Loo-Tam /s/ Martin L. Flanagan
Diomedes Loo-Tam, Martin L. Flanagan, Pribncipal
Principal Accounting Officer Financial Officer
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, certify that I am Secretary of FRANKLIN
TEMPLETON MONEY FUND TRUST (the "Trust").
As Secretary of the Trust, I further certify that the following
resolution was adopted by a majority of the Trustees of the Trust
present at a meeting held at 777 Mariners Island Boulevard, San
Mateo, California, on January 17, 1995.
RESOLVED, that a Power of Attorney, substantially
in the form of the Power of Attorney presented to
this Board, appointing Mark H. Plafker, Harmon E.
Burns, Deborah R. Gatzek, Karen L. Skidmore and
Larry L. Greene as attorneys-in-fact for the
purpose of filing documents with the Securities
and Exchange Commission, be executed by a majority
of the Trustees and designated officers.
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
/s/ Deborah R. Gatzek
Dated: January 17, 1995 Deborah R. Gatzek
Secretary
CERTIFICATE OF SECRETARY
I, Deborah R. Gatzek, certify that I am Secretary of The Money
Market Portfolios (the "Trust").
As Secretary of the Trust, I further certify that the following
resolution was adopted by a majority of the Trustees of the Trust
present at a meeting held at 777 Mariners Island Boulevard, San
Mateo, California, on January 17, 1995.
RESOLVED, that a Power of Attorney, substantially in
the form of the Power of Attorney presented to this
Board, appointing Harmon E. Burns, Deborah R. Gatzek,
Karen L. Skidmore, Larry L. Greene and Mark H. Plafker
as attorneys-in-fact for the purpose of filing
documents with the Securities and Exchange Commission,
be executed by each Trustee and designated officer.
I declare under penalty of perjury that the matters set forth in
this certificate are true and correct of my own knowledge.
/s/Deborah R. Gatzek
Dated: January 17, 1995 Deborah R. Gatzek
Secretary
